ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED AUGUST 31, 2014

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
to

Commission File No. 001-06198

UNITED REFINING COMPANY

(Exact name of registrant as specified in its charter)

Pennsylvania

25-1411751

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer

Identification No.)

See Table of Additional
Subsidiary Guarantor Registrants

15 Bradley Street, Warren, PA

16365-3299

(Address of principal executive offices)

(Zip Code)

(814) 723-1500

(Registrants telephone number, including area code)

Securities registered pursuant to Section 12 (b) of the Act:

None

Securities registered pursuant to Section 12 (g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to
file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website,
if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrants knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a small
reporting company. See definition of large accelerated filer accelerated filer and small reporting company in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer x (Do not check if a smaller reporting
company)

Small reporting company ¨

Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ¨ No x

As of November 21, 2014, 100 shares of the Registrants common stock, $0.10 par value per share, were
outstanding. All shares of common stock of the Registrants are held by an affiliate. Therefore, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant is zero.

United Refining Company is a Pennsylvania corporation that began business operations in 1902. We are the leading integrated refiner and marketer of petroleum products in western New York and northwestern
Pennsylvania, which is located within the Petroleum Administration for Defense Districts I (PADD I). We own and operate a medium complexity 70,000 barrel per day (bpd) petroleum refinery in Warren, Pennsylvania where we
refine crude oil into a variety of finished products, including various grades of gasoline, ultra low sulfur diesel fuel, kerosene, No. 2 heating oil and asphalt. We have a long history of service within our market area. Our first retail
service station was established in 1927 near the Warren, Pennsylvania refinery, and we have steadily expanded our distribution network over the years.

Our operations are organized into two major business segments: refining/wholesale and retail. The refining division
operates the refinery in Warren and offsite terminals. The wholesale division sells finished products produced at the Warren refinery, primarily in western New York and northwestern Pennsylvania, to both our retail network and to third-party
customers. The retail business segment sells petroleum products under the Kwik Fill®, Citgo®, Keystone® and Country Fair® brand names
at a network of Company operated retail units and convenience and grocery items through convenience stores under the Red Apple Food Mart® and Country Fair® brand
names.

For fiscal 2014, we had total net sales of
$3.4 billion. Of total sales, petroleum based sales were approximately 53% gasoline, 21% distillate, 17% asphalt and the remaining 9% were from sales of merchandise and other revenue.

Our Operations

Refining Operations

Our refinery, located on a 107-acre site in Warren, Pennsylvania, has a nominal capacity of 70,000 bpd of crude oil processing and
averaged saleable production of approximately 63,100 bpd during fiscal 2014. We believe our location in the product-short PADD I, in an area that is geographically distant from the majority of PADD I refining capacity, is a significant marketing
advantage. The nearest fuels refinery is over 160 miles from Warren, Pennsylvania and we believe that no significant production from such refinery is currently shipped into our primary market area.

A scheduled nine day reformer catalyst regeneration was
performed in December 2013. Intermediate product inventory management during December 2013 resulted in crude throughput being reduced to 52,300 bpd for the month of December.

In 2014, a planned turnaround of the entire refinery occurred
during the months of March and April. The turnaround of the crude unit lasted 33 days while the Fluid Catalytic Cracking (FCC) unit lasted 41 days. Crude throughputs during the months of March and April were 34,160 and 23,190 bpd,
respectively.

During August 2014 crude rates were
reduced to 57,600 bpd to manage intermediate product inventories in preparation for a planned reformer catalyst regeneration in September.

Our production of petroleum products from crude oil involves many complex steps, which are briefly summarized
below.

We seek to maximize refinery profitability
by selecting crude oil and other feedstocks taking into account factors including product demand and pricing in our market areas as well as price, quality and availability of various grades of crude oil. We also consider product inventory levels and
any planned turnarounds of refinery units for maintenance. The combination of these factors is optimized by a sophisticated proprietary linear programming computer model, which selects the most profitable feedstock and product mix. The linear
programming model is continuously updated and improved to reflect changes in the product marketplace and in the refinerys processing capability.

Blended crude is stored in a tank farm near the refinery, which has a capacity of approximately 512,000 barrels. The blended crude is then
brought into the refinery where it is first distilled at low pressure into its component streams in the crude and preflash unit. This yields the following intermediate products: light products consisting of fuel gas components (methane and ethane)
and LPG (propane and butane), naphtha or gasoline, kerosene, diesel or heating oil, heavy atmospheric distillate, and crude tower bottoms which are further distilled under vacuum conditions to yield light and heavy vacuum distillates and asphalt.

The intermediate products are then processed in
downstream units and blended to produce finished products. A naphtha hydrotreater treats naphtha and FCC light catalytic naphtha with hydrogen across a fixed bed catalyst to remove sulfur before further treatment. The treated naphtha is then
distilled into light and heavy naphtha at a prefractionator. Light naphtha is then sent to an isomerization unit and heavy naphtha is sent to a reformer, in each case for octane enhancement. The isomerization unit converts the light naphtha
catalytically into a gasoline component with 83 octane. The reformer unit converts the heavy naphtha into another gasoline component with up to 94 octane depending upon the desired octane requirement for the grade of gasoline to be produced. The
reformer also produces as a co-product, hydrogen needed to operate hydrotreating units in the refinery.

Raw kerosene is treated with hydrogen at a distillate hydrotreater to remove sulfur to make finished kerosene. A distillate hydrotreater
built in 1993 and modified in 2012 with the addition of a second reactor also treats raw distillates to produce ultra low sulfur diesel fuel.

The long molecular chains of the heavy atmospheric and vacuum distillates are broken or cracked in the FCC unit and separated
and recovered in the gas concentration unit to produce fuel gas, propylene, butylene, LPG, light and heavy catalytic naphtha gasoline, light cycle oil and clarified oil. Fuel gas is burned within the refinery, propylene is fed to a polymerization
unit which polymerizes its molecules into a larger chain to produce an 87 octane gasoline component, butylene is fed into an alkylation unit to produce a gasoline component and LPG is treated to remove trace quantities of water and then sold.
Clarified oil is burned in the refinery or sold. Various refinery gasoline components are blended together in refinery tankage to produce 87 octane and 93 octane finished gasoline. Likewise, light cycle oil is blended with other distillates to
produce No. 2 heating oil. FCC light and heavy catalytic naphtha is hydrotreated in order to meet new more stringent legally mandated limits on gasoline sulfur content which took effect January 1, 2008, and a portion of the light cycle oil
is hydrotreated in order to meet new more stringent legally mandated limits on diesel fuel sulfur content which took effect June 1, 2006.

Our refining configuration allows the processing of a wide variety of crude oil inputs. During the past five years our inputs have been
predominantly of Canadian origin and range from light low sulfur (38 degrees API, 0.5% sulfur) to high sulfur heavy asphaltic (21 degrees API, 3.5% sulfur). Our ability to market asphalt on a year round basis enables us to purchase selected heavier
crude oils at higher differentials and thus at a lower cost.

Substantially all of our crude supply is sourced from Canada and the northern plain states through the Enbridge
Pipeline. We are however not dependent on this source alone. We could within 90 days shift up to 70% of our crude oil requirements to some combination of domestic and offshore crude. With additional time, 100% of our crude requirements could be
obtained from non-Canadian sources. This change in crude supply could result in a different crude slate and alter product yields and product mix and could affect refinery profitability. Fifty-eight percent of our term contracts with our crude
suppliers are on a month-to-month evergreen basis, with 60-to-90 day cancellation provisions; 42% of our term crude contracts are on an annual basis (with month to month pricing provisions). As of August 31, 2014, we had supply contracts with
11 major suppliers for an aggregate of 63,335 bpd of crude oil. We have contracts with four suppliers amounting to approximately 67% of daily crude oil supply. None of the remaining suppliers accounted for more than 10% of our crude oil supply.

We access crude through the Kiantone Pipeline,
which connects with the Enbridge pipeline system in West Seneca, New York, which is near Buffalo. The Enbridge pipeline system provides access to most North American and foreign crude oils through three primary routes: (i) Canadian and US
domestic crude from both Western Canada and North Dakota (Bakken) are transported eastward through the Enbridge mainline system (ii) foreign crude oils unloaded at the Louisiana Offshore Oil Port can be transported north via the Capline and
Chicap pipelines and into the Enbridge (Lakehead) mainline system at Mokena, near Chicago, IL (iii) US domestic crude grades can be transported north via the Capline System and/or the Enbridge Mid-Continent (Ozark/Woodpat) system to Patoka,
Illinois where they can be moved via the Chicap Pipeline into the Enbridge (Lakehead) Mainline system at Mokena, near Chicago, Illinois. We also receive US domestic crude (Bakken) and western Canadian crudes via rail deliveries into Hamburg, NY
where these volumes are trans-loaded and moved by truck to West Seneca, NY and into the Kiantone Pipeline.

The Kiantone Pipeline, a 78-mile Company-owned and operated pipeline, connects our West Seneca, New York terminal at the pipelines
northern terminus to the refinerys tank farm at its southern terminus. We completed construction of the Kiantone Pipeline in 1971 and have operated it continuously since then. We are the sole shipper on the Kiantone Pipeline, and can currently
transport up to 70,000 bpd along the pipeline. Our right to maintain the pipeline is derived from approximately 265 separate easements, right-of-way agreements, licenses, permits, leases and similar agreements.

The pipeline operation is monitored by operators using a
recently upgraded Supervisory Control and Data Acquisition (SCADA) system. Shipments of crude arriving at the West Seneca terminal are separated and stored in one of the terminals three storage tanks, which have an aggregate
storage capacity of 413,000 barrels. The refinery tank farm has four additional crude storage tanks with a total capacity of 512,000 barrels. An additional 35,000 barrels of crude can be stored at the refinery.

Refinery Turnarounds

Turnaround cycles vary for different refinery units. A
planned turnaround of each of the two major refinery units (the crude unit and the FCC) is conducted approximately every three to five years, during which time such units are shut down for internal inspection and repair. The next turnaround cycle is
planned for 2017.

A turnaround of the whole
refinery was completed in March and April 2014. During the turnaround two new crude tanks with a capacity of 305,000 barrels were commissioned. In addition to the normal maintenance activities, new internals were installed in the FCC reactor to
improve liquid volume yield. Other improvements included upgrade of the FCC flue gas line, catalyst replacement at the reformer and sulfur plant along with vessel and equipment upgrades at the naphtha hydrotreater, distillate hydrotreater and sour
water stripper.

We defer the cost of turnarounds
when incurred and amortize them on a straight-line basis over the period of benefit, which ranges from 3 to 10 years (for tank turnarounds). Thus, we charge costs to production over the period most clearly benefited by the turnarounds.

The scheduled maintenance turnarounds result in an inventory build of petroleum products to
meet minimum sales demand during the maintenance shutdown period.

Wholesale Marketing and Distribution

On a wholesale basis, our wholesale division sells gasoline, distillate and asphalt products to distributor,
commercial and government accounts and we sell propane to liquefied petroleum gas marketers. Our wholesale gasoline customer base includes branded dealer/distributor units operating under our proprietary Keystone® and Kwik Fill® brand names and units operating under the
Citgo® brand pursuant to a license agreement granting us the right to use Citgos applicable brand names,
trademarks and other forms of Citgos identification. Approximately 20% of the gasoline stations within this network are branded Citgo®.

In fiscal 2014, we sold on a wholesale basis approximately 40,000 bpd of gasoline, distillate and asphalt products to distributor, commercial, and government accounts. In addition, we sell approximately
1,000 bpd of propane to liquefied petroleum gas marketers. In fiscal year 2014, our production of gasoline, distillate, and asphalt sold at wholesale was 30%, 81%, and 100%, respectively. We sell approximately 98% of our wholesale gasoline and
distillate products from our refinery in Warren, Pennsylvania, and our Company-owned and operated product terminals. The remaining 2% are sold through third-party exchange terminals.

We use a network of six terminals to store and distribute refined products. This network
provides distillate and asphalt storage capacities of approximately 1,225,000 barrels as of August 31, 2014. During fiscal 2014, approximately 83% of our refined products were transported from the refinery via truck transports, with the
remaining 17% transported by rail. All gasoline product is stored at the refinery. The majority of our wholesale and retail gasoline distribution is handled by common carrier trucking companies at competitive rates. We also operate a fleet of eight
tank trucks that supply approximately 21% of our Kwik Fill® retail stations.

In fiscal 2014, our retail network sold approximately 70% of
our gasoline production and approximately 20% of our distillate production. The remaining 30% of gasoline production and 80% of distillate production was sold to wholesale customers.

We distribute asphalt from the refinery by railcar or truck transport to end user contractors, in addition to re-supplying our asphalt
terminals. We own or lease terminals in Springdale and Dravosburg, Pennsylvania; Tonawanda and Oswego, New York; and Cordova, Alabama.

We believe that the location of our refinery provides us with a transportation cost advantage over our competitors, which is significant
within an approximately 100-mile radius of our refinery. For example, in Buffalo, New York over our last five fiscal years, including fiscal 2014, we have experienced an approximately 2.90 cents per gallon transportation cost advantage over those
competitors who are required to ship gasoline by pipeline and truck from New York Harbor sources to Buffalo.

Our ability to market asphalt is critical to the performance of our refinery. Crude oil scheduling and a consistent marketing effort
enables the refinery to process lower cost higher sulfur content crude oils, which in turn affords us higher refining margins. Sales of paving asphalt generally occur during the period May 1 through October 31 based on weather conditions.
In order to maximize our in season asphalt sales, we increase our asphalt storage capacity through the lease of outside terminals. Partially mitigating the seasonality of the asphalt paving business is our ability to sell asphalt year-round to
roofing shingle manufacturers. In fiscal year 2014, we sold 6.9 million barrels of asphalt.

We have a significant share of the asphalt market in southwestern New York and western and
central Pennsylvania as well as in the greater metro areas of Pittsburgh, Pennsylvania and Rochester and Buffalo, New York. We distribute asphalt from the refinery by railcar and truck transport to our owned and leased asphalt terminals in such
cities or their suburbs. Asphalt can be purchased or exchanged in the Gulf Coast area and delivered by barge to third party or Company-owned terminals near Pittsburgh.

Product distribution costs to both retail and wholesale
accounts are minimized through product exchanges. Through these exchanges, we have access to product supplies at approximately 18 sources located throughout our marketing area. We seek to minimize retail distribution costs through the use of a
system wide distribution model.

Retail Operations

As of August 31,
2014, 170 of our retail units were located in New York, 177 in Pennsylvania and 12 in Ohio. The retail segment sells petroleum products under the Kwik Fill®, Citgo® and Keystone® brand names and grocery items under the Red Apple Food Mart® and Country Fair® brand
names. We believe that Red Apple Food Mart®, Kwik Fill®, Country Fair®, Keystone® and Citgo® are well-recognized names in our marketing areas. Approximately 20% of the gasoline stations within this network are branded Citgo® pursuant to a license agreement granting us the right to use Citgos applicable brand names, trademarks and
other forms of Citgos identification. In fiscal year 2014, approximately 70% of the refinerys gasoline production was sold through our retail network. In addition to gasoline, many retail units sell diesel fuel and all units sell
convenience and grocery items through convenience stores under the Red Apple Food Mart® and Country Fair® brand names. As of August 31, 2014, we operated 359 units, of which 194 units are owned, 104 units are leased,
and the remaining stores are operated under a management agreement. 101 are Quick Serve Restaurants (QSRs) including franchise operations and eight of the units are full-service truck stops. Customers may pay for purchases with credit
cards including our own Kwik Fill® credit card. In addition to this credit card, we maintain a fleet credit card
catering to regional truck and automobile fleets. Sales of convenience products, which tend to have constant margins throughout the year, have served to reduce the effects of the seasonality inherent in gasoline retail margins. We maintain a 58% /
42% split between sales at our rural and urban units, balancing the higher volumes and lower gross margins in urban areas. We believe that the Companys operation of our retail units provides us with a significant advantage over competitors
that operate wholly or partly through dealer arrangements because we have greater control over pricing and operating expenses.

Retail Marketing and Distribution

We classify our retail stores into four categories: convenience stores, limited gasoline stations, truck stop facilities, and other
stores. Convenience stores sell a wide variety of foods, snacks, cigarettes and beverages and also provide self-service gasoline. 101 of our 359 retail outlets include QSRs where food is prepared on the premises for retail sales and also
distribution to our other nearby units that do not have in-store delicatessens. Limited gasoline stations sell gasoline, cigarettes, oil and related car care products and provide full service for gasoline customers. Truckstop facilities sell
gasoline and diesel fuel on a self-service and full-service basis. All truckstops include either a full or mini convenience store.

Total merchandise sales for fiscal year 2014 were $273.3 million, with a gross profit of approximately $69.1 million. Gross margins on the
sale of convenience merchandise averaged 25.3% for fiscal 2014 and have been relatively constant at 25.2% for the last three years.

Merchandise Supply

Tripifoods, Buffalo, New York is our primary wholesale grocery supplier for our entire chain. During fiscal year 2014, we purchased
approximately 75.9% of our convenience merchandise from this vendor. Tripifoods supplies us with products including tobacco, candy, deli, grocery, health and beauty products, and sundry items.

We also purchase coffee, dairy products, beer, soda, snacks, and novelty goods from direct store vendors for resale. We annually review our suppliers costs and services versus those of
alternate suppliers. We believe that alternative sources of merchandise supply at competitive prices are readily available.

Location Performance Tracking

We maintain a store tracking mechanism to collect operating data including sales and inventory levels for our retail network. Data
transmissions are made using personal computers, which are available at each location. Once verified, the data interfaces with a variety of retail accounting systems, which support daily, weekly, and monthly performance reports. These different
reports are then provided to both the field management and administrative personnel. Upon completion of a capital project, management tracks before and after performance, to evaluate the return on investment which has resulted from the
improvements.

Environmental Regulations

General

We are subject to extensive federal, state and local laws
and regulations relating to fuel quality, pollution control and protection of the environment, such as those governing releases of certain materials to the air and water and the storage, treatment, transportation, disposal and clean-up of wastes
located on land. As with the industry in general, compliance with existing and anticipated environmental laws and regulations increases the overall cost of business, including capital costs to construct, maintain and upgrade equipment and
facilities.

Starting Jan. 1, 2013 the Company became an obligated party under the USEPAs Renewable Fuel Standard (RFS) and is
required to satisfy its Renewable Volume Obligation (RVO) on an annual basis. To meet the RVO, the Companys fuels must either contain the mandated renewable fuel components, or credits must be purchased to cover any shortfall. The
Company has met its RVO for 2014 and expects to also satisfy the requirements for 2015 without the purchase of credits, known as RINs (Renewable Identification Numbers). As the RFS program is currently structured, the RVO of all
obligated parties will increase annually, while the ability to incorporate increasing volumes of renewable fuel components into fuel products remains limited. This phenomenon, better known as the blend wall, will be experienced
throughout the industry and is expected to present challenges in future years. We will also continue to monitor proposals to amend the RFS to address the blend wall issue and evaluate its effect on future operations.

On July 20, 2010 the State of New York mandated that all
heating oil sold in the state contain no more than 15 parts per million (ppm) sulfur beginning July 1, 2012. Pennsylvania has also lowered the sulfur content maximum starting July 1, 2016 from 5,000 ppm to 500 ppm. We are complying with
the New York mandate and will comply with the Pennsylvania mandate when applicable.

The USEPA has finalized the Tier 3 gasoline regulation which calls for a further reduction in the average yearly sulfur content below the existing Tier 2 sulfur standard. The regulations consist of
reducing the refinery annual average maximum sulfur content from 30 ppm to 10 ppm. In the Final Rule there is a three year exemption for Small Volume Refineries, which would include the Company, giving us a 2020 effective date rather
than 2017. A preliminary estimate to modify the refinery process to meet this new requirement is approximately $20 million.

Over the past three years we have maintained compliance with the benzene standard that is part of the Mobile Source Air Toxics Rule
No. 2 (MSAT II). We expect to purchase benzene credits for the 2014 compliance period at an estimated cost of $1.5 million.

We are also monitoring closely all climate change and Greenhouse Gas (GHG)
legislation, better known as Cap and Trade. We believe, however, that implementation of reasonable, incremental changes over time will not have a material adverse effect on the Companys consolidated financial position or operations. GHG
reduction mandates and their effect on our business are, however, unknown until all aspects of the programs are final and implementing regulations are available.

Retail Gasoline Stations

We currently operate gasoline stations in three states with
underground petroleum product storage tanks and in the past have operated gasoline stations that are now closed. Federal and state statutes and regulations govern the installation, operation and removal from service of these underground storage
tanks and associated piping and product dispensing systems. The operation of underground storage tanks and systems carries the risk of contamination to soil and groundwater with petroleum products. We manage this risk by promptly responding to
actual and suspected leaks and spills and implementing remedial action plans meeting regulatory requirements. In addition to prompt response and remediation, we receive reimbursement for response costs associated with leaks and spills in the
Commonwealth of Pennsylvania through the Underground Storage Tank Indemnification Fund.

Competition

Our primary market area is western New York and northwestern Pennsylvania and our core market area encompasses our Warren County base and the eight contiguous counties in New York and Pennsylvania. The
principal competitive factors affecting our wholesale marketing business are the price and quality of our products, as well as the reliability and availability of supply and the location of multiple distribution points.

Petroleum refining is highly competitive. With respect to
wholesale gasoline and distillate sales, we compete with P.E.S., P.B.F., Valero, Exxon-Mobil, and other refiners and marketers via the pipeline system. We primarily compete with Marathon Petroleum in the asphalt market, both in New York and
Pennsylvania. Many of our principal competitors are integrated multinational oil companies that are substantially larger and better known than us. Because of their diversity, integration of operations, larger capitalization and greater resources,
these major oil companies may be better able to withstand volatile market conditions, compete on the basis of price and more readily obtain crude oil in times of shortages.

The principal competitive factors affecting our refining
operations are crude oil and other feedstock costs, refinery efficiency, refinery product mix and product distribution and transportation costs. Certain of our larger competitors have refineries, which are larger and more complex and, as a result,
could have lower per barrel costs or higher margins per barrel of throughput. We have no crude oil reserves and are not engaged in exploration. We believe that we will continue to be able to obtain adequate crude oil and other feedstocks at
generally competitive prices for the foreseeable future.

It is our view that the high construction costs and the stringent regulatory requirements inherent in petroleum refinery operations make it uneconomical for new competing refineries to be constructed in
our primary market area. The nearest fuels refinery is over 160 miles from Warren, Pennsylvania and we believe that no significant production from such refinery is currently shipped into our primary market area. In addition, four refineries in PADD
I were forced to shut down during the recent economic downturn. We believe this capacity rationalization should improve overall utilization by remaining refineries in PADD I, including us, and result in improved margins as demand improves.

The principal competitive factors affecting our
retail marketing network are location, product price, overall appearance and cleanliness of stores and brand identification. Competition from large, integrated oil companies, supermarkets, and big box convenience store chains such as
Wal-Mart and Sams Club, is expected to be ongoing. The principal competitive factors affecting our wholesale marketing business are the price and quality of our products, as well as the reliability and availability of supply and the location
of multiple distribution points.

As of August 31, 2014, we had approximately 4,207 employees; 1,894 full-time and 2,313 part-time employees. Approximately 3,660
persons were employed at our retail units, 346 persons at our refinery, Kiantone Pipeline and at terminals operated by us, with the remainder at our office in Warren, Pennsylvania. We have entered into collective bargaining agreements with
International Union of Operating Engineers Local No. 95, United Steel Workers of America Local No. 2122-A and General Teamsters Local Union No. 397 covering 242, 7, and 19 employees, respectively. The agreements expire on
February 1, 2017, January 31, 2017 and July 31, 2018, respectively. We believe that our relationship with our employees is good.

Intellectual Property

We own various federal and state service and trademarks used by us, including Kwik Fill®, United®, Country Fair®, SuperKwik®, Keystone®, SubFare® and PizzaFare®. Our subsidiary, Country Fair, and we have licensing agreements with Citgo Petroleum Corporation (Citgo)
for the right to use Citgos applicable brand names, trademarks and other forms of Citgos identification for petroleum products purchased under a distributor franchise agreement.

We have obtained the right to use the Red Apple Food Mart® service mark to identify our retail units under a royalty-free, nonexclusive, nontransferable license from Red Apple
Supermarkets, Inc., a corporation which is indirectly wholly owned by John A. Catsimatidis, the indirect sole stockholder, Chairman of the Board and Chief Executive Officer of the Company. The license is for an indefinite term. The licensor has the
right to terminate this license in the event that we fail to maintain quality acceptable to the licensor. We license the right to use the Keystone® trademark to approximately 40 independent distributors on a non-exclusive royalty-free basis.

We currently do not own any material patents. Management
believes that the Company does not infringe upon the patent rights of others, nor does our lack of patent ownership impact our business in any material manner.

Governmental Approvals

We believe we have obtained all necessary governmental approvals, licenses, and permits to operate the refinery and convenience stores.

Financing

On August 30, 2013 the Company redeemed $127,750,000
aggregate principal amount of its outstanding $365,000,000 10.500% First Priority Senior Secured Notes due 2018 (Senior Secured Notes due 2018). Funding for the redemption was provided by the Companys sale of $141,163,750 of 6.00%
Fixed Rate Cumulative Perpetual Preferred Stock Series A (Preferred Stock, see Note 13) to United Refining, Inc. (URI), its parent (see Note 14). In accordance with the indenture governing the Senior Secured Notes due 2018,
the Company obtained an opinion concerning the fairness from a financial point of view of the issuance of the Preferred Stock to URI.

The Senior Secured Notes due 2018 were redeemed at a redemption price of 110.50% of the principal amount thereof, plus accrued and unpaid
interest to August 30, 2013. In connection with the redemption, a loss of $18,727,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $13,414,000, a write-off of deferred financing costs of $1,998,000 and
a write-off of unamortized debt discount of $3,315,000.

On June 18, 2013, the Company amended its Revolving Credit Facility (Amended and Restated Revolving Credit Facility) with PNC Bank, National Association as Administrator (the
Agent). The expiration date of the Amended and Restated Revolving Credit Facility was extended to November 29, 2017 and the commitment

fee on the unused balance of the facility was reduced to 0.25%. The maximum facility commitment remains at $175,000,000 and interest will now be calculated as follows: for base rate borrowings,
at the greater of the Agents prime rate, federal funds open rate plus 0.5% or the daily LIBOR rate plus 1.0% plus the applicable margin of .75% to 1.75% and (b) for euro-rate borrowings, at the LIBOR rate plus an applicable margin of
2.25% to 3.25%. The applicable margin will vary depending on a formula calculating the Companys unused availability under the facility. Until maturity, the Company may borrow on a borrowing base formula as set forth in the facility. The
participating banks in the Amended and Restated Revolving Credit Facility are PNC Bank, National Association, Bank of America, N.A., Manufacturers and Traders Trust Company, and Bank Leumi USA. The applicable margin varies with our facility leverage
ratio calculation. The Agent Banks prime rate at August 31, 2014 was 3.25%.

The Amended and Restated Revolving Credit Facility is secured primarily by certain cash accounts, accounts receivable and inventory. Until maturity, we may borrow on a borrowing base formula as set forth
in the facility. We had outstanding letters of credit of $8,752,000 as of August 31, 2014. As of August 31, 2014, we had no outstanding borrowings under the Revolving Credit Facility resulting in net availability of $166,248,000.

ITEM 1A.

RISK FACTORS.

Risks Relating to the Business

Our ability to pay interest and principal on the Senior Secured Notes due 2018 and to satisfy our other debt obligations will depend
upon our future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, most of which are beyond our control.

Our ability to pay interest and principal on the Senior Secured Notes due 2018 and to satisfy our other debt
obligations will depend upon our future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, most of which are beyond our control. We anticipate that our operating cash flow,
together with borrowings under the Revolving Credit Facility, will be sufficient to meet our operating expenses and capital expenditures, to sustain operations and to service our interest requirements as they become due.

The Companys 10.5% Senior Secured Notes mature in 2018,
at which time the Company will either have to pay the principal amount in full or refinance the Notes.

If we are unable to generate sufficient cash flow to service our indebtedness and fund our capital expenditures, we will be forced to
adopt an alternative strategy that may include reducing or delaying capital expenditures, selling assets, restructuring or refinancing our indebtedness (including the notes) or seeking additional equity capital. There can be no assurance that any of
these strategies could be affected on satisfactory terms, if at all. Our ability to meet our debt service obligations will be dependent upon our future performance which, in turn, is subject to future economic conditions and to financial, business
and other factors, many of which are beyond our control.

The price volatility of crude oil, other feedstocks, refined petroleum products and fuel and utility services may have a material adverse effect on our earnings, cash flows and liquidity.

Our refining earnings, cash flows and
liquidity from operations depend primarily on the margin above operating expenses (including the cost of refinery feedstocks, such as crude oil and natural gas liquids that are processed and blended into refined products) at which we are able to
sell refined products. Refining is primarily a margin-based business and, to increase earnings, it is important to maximize the yields of high value finished products while minimizing the costs of feedstock and operating expenses. When the margin
between refined product prices and crude oil and other feedstock costs contracts, our earnings, and cash flows are negatively affected. Refining margins historically have been volatile, and are likely to continue to be volatile, as a result of a
variety of factors, including fluctuations in the prices of crude oil, other feedstocks, refined products and fuel and

utility services. While an increase or decrease in the price of crude oil may result in a similar increase or decrease in prices for refined products, there may be a time lag in the realization
of the similar increase or decrease in prices for refined products. The effect of changes in crude oil prices on our refining margins therefore depends in part on how quickly and how fully refined product prices adjust to reflect these changes.

In addition, the nature of our business requires
us to maintain substantial refined product inventories. Because refined products are commodities, we have no control over the changing market value of these inventories. Our refined product inventory is valued at the lower of cost or market value
under the last-in, first-out (LIFO), inventory valuation methodology. If the market value of our refined product inventory were to decline to an amount less than our LIFO cost, we would record a write-down of inventory and a non-cash
charge to cost of sales.

Prices of crude oil,
other feedstocks and refined products depend on numerous factors beyond our control, including the supply of and demand for crude oil, other feedstocks, gasoline, diesel, asphalt and other refined products. Such supply and demand are affected by,
among other things:



changes in global and local economic conditions;



domestic and foreign demand for fuel products, especially in the United States, China and India;



worldwide political conditions, particularly in significant oil producing regions such as the Middle East, West Africa and Latin America;



the level of foreign and domestic production of crude oil and refined products and the volume of crude oil, feedstock and refined products imported
into the United States;



availability of and access to transportation infrastructure;



utilization rates of U.S. refineries;



the ability of the members of the Organization of Petroleum Exporting Countries (OPEC) to affect oil prices and maintain production
controls;

local factors, including market conditions, weather conditions and the level of operations of other refineries and pipelines in our markets.

Our direct operating expense
structure also impacts our earnings. Our major direct operating expenses include employee and contract labor, maintenance and energy costs. Our predominant variable direct operating cost is energy, which is comprised primarily of fuel and other
utility services. The volatility in costs of fuel, principally natural gas, and other utility services, principally electricity, used by our refinery and other operations affect our operating costs. Fuel and utility prices have been, and will
continue to be, affected by factors outside our control, such as supply and demand for fuel and utility services in both local and regional markets. Natural gas prices have historically been volatile and, typically, electricity prices fluctuate with
natural gas prices. Future increases in fuel and utility prices may have a negative effect on our earnings and cash flows.

Volatility in refined product prices also affects our borrowing base under our revolving credit facility. A decline in prices of our
refined products reduces the value of our refined product inventory collateral, which, in turn, may reduce the amount available for us to borrow under our revolving credit facility.

Our results of operations are affected by crude oil differentials, which may fluctuate
substantially.

Our results of operations are
affected by crude oil differentials, which may fluctuate substantially. Since 2010, refined product prices have been more correlated to prices of Brent crude oil (Brent) than to NYMEX WTI, the traditional U.S. crude oil benchmark, as the
discount to which a barrel of NYMEX WTI traded relative to a barrel of Brent has widened significantly relative to historical levels. This differential has also been very volatile as a result of various continuing geopolitical events.

We are subject to interruptions of supply and distribution
as a result of our reliance on pipelines for our supply of crude oil. Prolonged disruption to the Enbridge Pipeline or the Kiantone Pipeline may have a material adverse effect on our business, results of operations or financial condition.

Our refinery receives substantially all of
its crude oil through pipelines. We could experience an interruption of supply, or an increased cost of receiving crude oil, if the ability of these pipelines to transport crude oil or blendstocks is disrupted because of accidents, weather
interruptions, governmental regulation, terrorism, other third party action or any of the types of events described in the preceding risk factor.

We obtain substantially all of our crude oil supply through pipelines owned and operated by Enbridge Energy Partners (Enbridge
Pipeline), and the Kiantone Pipeline, which we own and operate. Any prolonged disruption to the operations of our refinery, the Enbridge Pipeline or the Kiantone Pipeline, whether due to labor difficulties, destruction of or damage to such
facilities, severe weather conditions, interruption of utilities service or other reasons, would have a material adverse effect on our business, results of operations or financial condition. Further, our property and business interruption insurance
may not compensate us adequately for any losses that occur.

In addition, due to the common carrier regulatory obligation applicable to interstate oil pipelines, capacity must be prorated among shippers in an equitable manner in accordance with the tariff then in
effect in the event there are nominations in excess of capacity. Therefore, nominations by new shippers or increased nominations by existing shippers may reduce the capacity available to us with respect to the Enbridge pipeline system. Any prolonged
interruption in the operation or curtailment of available capacity of the pipelines that we rely upon for transportation of crude oil could have a material adverse effect on our business, financial condition, results of operations and cash flows
and, as a result, our ability to make distributions (See Item 7, Recent Developments).

The dangers inherent in our operations could cause disruptions and could expose us to potentially significant losses, costs or liabilities and reduce our liquidity. We are particularly vulnerable to
disruptions in our operations because all of our refining operations are conducted at a single facility.

Our operations are subject to significant hazards and risks inherent in refining operations and in transporting and storing crude oil,
intermediate products and refined products. These hazards and risks include, but are not limited to, natural disasters, fires, explosions, pipeline ruptures and spills, third party interference and mechanical failure of equipment at our facilities,
any of which could result in production and distribution difficulties and disruptions, pollution (such as oil spills, etc.), personal injury or wrongful death claims and other damage to our properties and the property of others.

There is also risk of mechanical failure and equipment
shutdowns both in the normal course of operations and following unforeseen events. In such situations, undamaged refinery processing units may be dependent on, or interact with, damaged process units and, accordingly, are also subject to being shut
down.

Because all of our refining operations are
conducted at a single refinery, any of such events at our refinery could significantly disrupt our production and distribution of refined products. Any sustained disruption would have a material adverse effect on our business, financial condition,
results of operations and cash flows and, as a result, our ability to make distributions.

Our suppliers source substantially all of our crude oil from Canada and the northern
plain states and may experience interruptions of supply from those regions.

Our suppliers source substantially all of our crude oil from Canada and the northern plain states. As a result, we may be disproportionately exposed to the impact of delays or interruptions of supply from
those regions caused by transportation capacity constraints, curtailment of production, unavailability of equipment, facilities, personnel or services, significant governmental regulation, natural disasters, adverse weather conditions, plant
closures for scheduled maintenance or interruption of transportation of oil or natural gas produced from the wells in those areas.

Competition from companies having greater financial and other resources than we do could materially and adversely affect our business
and results of operations.

Our refining
operations compete with domestic refiners and marketers in the PADD I region of the United States, as well as with domestic refiners in other PADD regions and foreign refiners that import products into the United States. In addition, we compete with
producers and marketers in other industries that supply alternative forms of energy and fuels to satisfy the requirements of our industrial, commercial and individual customers. Certain of our competitors have larger, more complex refineries, and
may be able to realize lower per-barrel costs or higher margins per barrel of throughput. Several of our principal competitors are integrated national or international oil companies that are larger and have substantially greater resources than we do
and have access to proprietary sources of controlled crude oil production. Unlike these competitors, we obtain substantially all of our feedstocks from unaffiliated sources. Because of their integrated operations and larger capitalization, these
companies may be more flexible in responding to volatile industry or market conditions, such as shortages of crude oil supply and other feedstocks or intense price fluctuations.

Newer or upgraded refineries will often be more efficient
than our refinery, which may put us at a competitive disadvantage. While we have taken significant measures to maintain and upgrade units in our refinery by installing new equipment and repairing equipment to improve our operations, these actions
involve significant uncertainties, since upgraded equipment may not perform at expected throughput levels, the yield and product quality of new equipment may differ from design specifications and modifications may be needed to correct equipment that
does not perform as expected. Any of these risks associated with new equipment, redesigned older equipment or repaired equipment could lead to lower revenues or higher costs or otherwise have an adverse effect on future results of operations and
financial condition and our ability to make distributions. Over time, our refinery may become obsolete, or be unable to compete, because of the construction of new, more efficient facilities by our competitors.

We may incur significant liability under, or costs and
capital expenditures to comply with, environmental, health and safety regulations, which are complex and change frequently.

Our refinery and pipelines operations are subject to federal, state and local laws regulating, among other things, the generation,
storage, handling, use, treatment and transportation of petroleum and hazardous substances, the emission and discharge of materials into the environment, waste management, characteristics and composition of gasoline and diesel and other matters
otherwise relating to the protection of the environment. Our operations are also subject to various laws and regulations relating to occupational health and safety. Compliance with the complex array of federal, state and local laws relating to the
protection of the environment, health and safety is difficult and likely will require us to make significant expenditures. Moreover, our business is inherently subject to accidental spills, discharges or other releases of petroleum or hazardous
substances into the environment including at neighboring areas or third party storage, treatment or disposal facilities. Certain environmental laws impose joint and several liabilities without regard to fault or the legality of the original conduct
in connection with the investigation and cleanup of such spills, discharges or releases. As such, we may be required to pay more than our fair share of such investigation or cleanup. We may not be able to operate in compliance with all applicable
environmental, health and safety laws, regulations and permits at all times.

Violations of applicable legal or regulatory requirements could result in substantial fines, criminal sanctions, permit revocations, injunctions and/or facility shutdowns. We may also be required
to make significant capital expenditures or incur increased operating costs or change operations to achieve compliance with applicable standards.

We cannot predict what additional environmental, health and safety legislation or regulations will be enacted or become effective in the
future or how existing or future laws or regulations will be administered or interpreted with respect to our operations. Many of these laws and regulations are becoming increasingly stringent, and the cost of compliance with these requirements can
be expected to increase over time. For example, on June 1, 2012, the U.S. Environmental Protection Agency (EPA) issued final amendments to the New Source Performance Standards (NSPS) for petroleum refineries, including
standards for emissions of nitrogen oxides from process heaters and work practice standards and monitoring requirements for flares. We are evaluating the regulation and amended standards, as may be applicable to the flare, process heaters and
operations at our refinery. We cannot currently predict the costs that we may have to incur, if any, to comply with the amended NSPS, but costs could be material. In addition, the EPA has announced new Tier 3 motor vehicle emission and
fuel standards. These regulations lower the maximum average sulfur content of gasoline from 30 parts per million to 10 parts per million. We may at some point in the future be required to make significant capital expenditures and/or incur materially
increased operating costs to comply with the new standards. Expenditures or costs for environmental, health and safety compliance could have a material adverse effect on our results of operations, financial condition and profitability and, as a
result, our ability to make distributions.

Compliance with and changes in tax laws could adversely affect our performance.

We are subject to extensive tax liabilities, including
federal, state and transactional taxes such as excise, sales/use, payroll, franchise, withholding and ad valorem taxes. New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that
could result in increased expenditures for tax liabilities in the future. There can be no certainty of the effect that increases in taxes, or imposition of new taxes, could have on us, or whether such taxes would be passed on to our customers.
Certain of these liabilities are subject to periodic audits by the respective taxing authority, which could increase our tax liabilities. Subsequent changes to our tax liabilities as a result of these audits may also subject us to interest and
penalties.

A decrease in government funding
for paving activity could lead to a decrease in demand for asphalt, which could materially adversely affect refining margins.

In fiscal 2014, asphalt sales represented 17% of our total revenues. Over the same period, approximately 90% of our asphalt was produced
for use in paving or repaving roads and highways. The level of paving activity is, in turn, dependent upon funding available from federal, state and local governments. Funding for paving has been affected in the past, and may be affected in the
future, by budget difficulties at the federal, state or local levels. A decrease in demand for asphalt could cause us to sell asphalt at significantly lower prices or to curtail production of asphalt by processing more costly lower sulfur content
crude oil which would adversely affect refining margins.

We have an indirect controlling stockholder.

John A. Catsimatidis indirectly owns all of our outstanding voting stock. By virtue of such stock ownership, Mr. Catsimatidis has the power to control all matters submitted to our stockholder and to
elect all of our directors.

Substantially all of our employees are covered by three
noncontributory defined benefit pension plans. As of August 31, 2014, as measured under ASC 715 (which is not the same as the measure used for purposes of calculating required contributions and potential liability to the Pension Benefit
Guaranty Corporation, or PBGC), the aggregate accumulated benefit obligation under our pension plans was approximately $119.2 million and the value of the assets of the plans was approximately $93.2 million. In fiscal 2014, we contributed $5.9
million to the three plans, and we have made additional contributions to our pension plans of $1.1 million in fiscal year 2014. If the performance of the assets in our pension plans does not meet our expectations or if other actuarial assumptions
are modified, our contributions for future years could be higher than we expect.

Our pension plans are subject to the Employee Retirement Income Security Act of 1974, or ERISA. Under ERISA, the PBGC generally has the authority to terminate an underfunded pension plan if the possible
long-run loss of the PBGC with respect to the plan may reasonably be expected to increase unreasonably if the plan is not terminated. In the event our pension plans are terminated for any reason while the plans are underfunded, we will incur a
liability to the PBGC that may be equal to the entire amount of the underfunding.

The indenture governing our senior secured notes and our
revolving credit facility contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on
our ability, among other things, to:

enter into agreements that restrict distributions from restricted subsidiaries;



incur liens;



sell or otherwise dispose of assets, including capital stock of subsidiaries;



enter into new lines of business;



enter into transactions with affiliates; and



merge, consolidate or sell substantially all of our assets.

A breach of the covenants under the indenture governing the
senior secured notes or under the credit agreement governing the revolving credit facility could result in an event of default under the applicable indebtedness. Such default may allow the creditors to accelerate the related debt and may result in
the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under our revolving credit facility would permit the lenders under our revolving credit facility to terminate all
commitments to extend further credit under that facility. Furthermore, if we were unable to repay the amounts due and payable under our revolving credit facility or indenture, those creditors could proceed against the collateral granted to them to
secure that indebtedness.

In the event our
lenders or noteholders accelerate the repayment of our borrowings, we may not have sufficient assets to repay that indebtedness. As a result of these restrictions, we may be:

unable to raise additional debt or equity financing to operate during general economic or business downturns; or



unable to compete effectively or to take advantage of new business opportunities.

The Senior Secured Notes due 2018 are secured by certain
assets of the Company and a foreclosure on such liens could adversely affect our business.

The Senior Secured Notes due 2018 are secured by a pledge of the stock of our subsidiary Kiantone Pipeline Corporation and, subject to certain exceptions, by a mortgage lien on and a security interest in
the assets comprising the refinery. In case of a continuing event of default by the Company, the collateral agent may exercise all rights of a mortgagee and/or secured party under applicable law, including, without limitation, transferring to itself
or a nominee title to such collateral, which could adversely affect our business.

We may issue additional notes and enter into hedging activities that would be secured by the same collateral securing the Senior Secured Notes due 2018.

Subject to the covenants and conditions contained in the
indenture, we are permitted to issue additional notes and enter into hedging obligations secured by a lien that ranks equally with the Senior Secured Notes due 2018. In addition, the estimated net book value of the collateral is substantially less
than the outstanding principal amount of the Senior Secured Notes due 2018 and the mortgage on the refinery is limited to a stated maximum principal amount of $450 million. To the extent that the Senior Secured Notes due 2018, any obligations in
respect of hedging arrangements and any other obligations secured by the mortgage exceed $450 million, the principal amount of such obligations in excess of such capped amount is not secured by the mortgage. Moreover, by its nature, some or all of
the collateral may be illiquid and may have no readily ascertainable market value. Any additional obligations, and the limited net book value and potential illiquidity of the collateral, may limit the recovery from the realization of the value of
such collateral available to satisfy the holders of the Senior Secured Notes due 2018.

Our ability to repurchase the Senior Secured Notes due 2018 upon a change of control may be limited.

Upon the occurrence of specified change of control events, we are required to offer to repurchase all outstanding Senior Secured Notes due
2018 at 101% of the principal amount, plus accrued and unpaid interest to the date of repurchase. The lenders under the Amended and Restated Revolving Credit Facility have the right to accelerate the indebtedness thereunder upon a change of control.
Any of our future debt agreements may contain similar provisions. However, we may not have sufficient funds at the time of the change of control to make the required repurchase of Senior Secured Notes due 2018 or repayment of our other indebtedness.
The terms of the Amended and Restated Revolving Credit Facility also limit our ability to purchase the Senior Secured Notes due 2018 until all debt under the Amended and Restated Revolving Credit Facility is paid in full. Any of our future debt
agreements may contain similar restrictions. If we fail to repurchase any Senior Secured Notes due 2018 submitted in a change of control offer, it would constitute an event of default under the indenture governing the Senior Secured Notes due 2018
which could, in turn, constitute an event of default under our other indebtedness, even if the change of control itself would not cause a default.

ITEM 1B.

UNRESOLVED STAFF COMMENTS.

Not Applicable.

ITEM 2.

PROPERTIES.

We own a 107-acre site in Warren, Pennsylvania upon which we operate our refinery. The site also contains an office building housing our
principal executive office.

We own various real property in the states of Pennsylvania, New York, Ohio, and Alabama,
upon which, as of August 31, 2014, we operated 194 retail units and two crude oil and six refined product storage terminals. We also own the 78-mile long Kiantone Pipeline, a pipeline which connects our crude oil storage terminal to the
refinerys tank farm. Our right to maintain the pipeline is derived from approximately 265 separate easements, right-of-way agreements, leases, permits, and similar agreements. We also have easements, right-of-way agreements, leases, permits,
and similar agreements that would enable us to build a second pipeline on property contiguous to the Kiantone Pipeline. We also own a partially completed 50 million gallon per year biodiesel facility in Brooklyn, New York.

As of August 31, 2014, we also lease an aggregate of 165
sites in Pennsylvania, New York, and Ohio upon which we operate retail units.

ITEM 3.

LEGAL PROCEEDINGS.

The Company and its subsidiaries are from time to time parties to various legal proceedings that arise in the ordinary course of their
respective business operations. These proceedings include various administrative actions relating to federal, state and local environmental laws and regulations as well as civil matters before various courts seeking money damages. The Company
believes that if the legal proceedings in which it is currently involved were determined against the Company, there would be no material adverse effect on the Companys operations or its consolidated financial condition. In the opinion of
management, all such matters are adequately covered by insurance, or if not so covered, are without merit or are of such kind, or involve such amounts that an unfavorable disposition would not have a material adverse effect on the consolidated
operations or financial position of the Company.

The following table sets forth certain historical financial and operating data (the Selected Information) as of the end of and
for each of the years in the five-year period ended August 31, 2014. The selected income statement, balance sheet, financial and ratio data as of and for each of the five-years ended August 31, 2014 has been derived from our audited
consolidated financial statements. The operating information for all periods presented has been derived from our accounting and financial records. The Selected Information set forth below should be read in conjunction with, and is qualified by
reference to, Managements Discussion and Analysis of Financial Condition and Results of Operations in Item 7 and our Consolidated Financial Statements and Notes thereto in Item 8 and other financial information included
elsewhere herein.

Year Ended August 31,

2014

2013

2012

2011

2010

(in thousands)

Income Statement Data:

Net sales

$

3,439,218

$

3,681,253

$

3,730,925

$

3,166,876

$

2,654,401

Refining operating expenses (1)

117,104

119,549

103,001

106,715

111,078

Selling, general and administrative expenses

162,764

163,874

157,581

149,456

150,825

Operating income (loss)

144,177

328,608

358,350

33,332

(78,091

)

Interest expense

26,677

39,530

40,913

40,567

35,177

Interest income

336

495

44

17

6

Other, net

(2,897

)

(3,819

)

(4,711

)

(2,564

)

(1,518

)

Loss on early extinguishment of debt



(18,727

)



(1,245

)



Income (Loss) before income tax expense (benefit)

114,939

267,027

312,770

(11,027

)

(114,780

)

Income tax expense (benefit)

43,826

98,344

121,954

(3,619

)

(38,646

)

Net income (loss)

71,113

168,683

190,816

(7,408

)

(76,134

)

Less net income attributable to non-controlling interest







711



Net income (loss) attributable to United Refining Companys stockholder

71,113

168,683

190,816

(8,119

)

(76,134

)

Balance Sheet Data (at end of period):

Total assets

870,464

796,295

728,330

670,611

637,103

Total debt

239,525

238,706

359,996

381,087

413,053

Total stockholders equity

384,225

357,203

141,276

20,753

26,237

(1)

Refinery operating expenses include refinery fuel produced and consumed in refinery operations.

ITEM 7.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward Looking Statements

This Annual Report on Form 10-K contains certain statements
that constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements may include, among other things, United Refining Company and its subsidiaries current
expectations with respect to future operating results, future performance of its refinery and retail operations, capital expenditures and other financial items. Words such as expects, intends, plans,
projects, believes, estimates, may, will, should, shall, anticipates, predicts, and similar expressions typically identify such forward
looking statements in this Annual Report on Form 10-K.

By their nature, all forward looking statements involve risk and uncertainties. All phases of the Companys operations involve risks and uncertainties, many of which are outside of the Companys
control, and any one of

which, or a combination of which, could materially affect the Companys results of operations and whether the forward looking statements ultimately prove to be correct. Actual results may
differ materially from those contemplated by the forward looking statements for a number of reasons.

Although we believe our expectations are based on reasonable assumptions within the bounds of its knowledge, investors and prospective
investors are cautioned that such statements are only projections and that actual events or results may differ materially depending on a variety of factors described in greater detail in the Companys filings with the SEC, including quarterly
reports on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K, etc. In addition to the factors discussed elsewhere in this Annual Report 10-K, the Companys actual consolidated quarterly or annual operating results have been
affected in the past, or could be affected in the future, by additional factors, including, without limitation:



general economic, business and market conditions;



repayment of debt;



the effect of the current banking and credit crisis on the Company and our customers and suppliers;



risks and uncertainties with respect to the actions of actual or potential competitive suppliers of refined petroleum products in our markets;



the demand for and supply of crude oil and refined products;



the spread between market prices for refined products and market prices for crude oil;



the possibility of inefficiencies or shutdowns in refinery operations or pipelines;



the availability and cost of financing to us;



environmental, tax and tobacco legislation or regulation;



volatility of gasoline prices, margins and supplies;



merchandising margins;



labor costs;



level of capital expenditures;



customer traffic;



weather conditions;



acts of terrorism and war;



business strategies;



expansion and growth of operations;



future projects and investments;



expected outcomes of legal and administrative proceedings and their expected effects on our financial position, results of operations and cash flows;



future operating results and financial condition; and



the effectiveness of our disclosure controls and procedures and internal control over financial reporting.

All subsequent written and oral forward looking statements
attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing. We undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any
such forward looking statements that may be made to reflect events or circumstances that occur, or which we become aware of, after the date of this Annual Report on Form 10-K.

Our primary business objective is to strengthen our position
as a leading producer and marketer of high quality refined petroleum products within our market area. We plan to accomplish this strategy through continued attention to optimizing our operations, resulting in the lowest possible operating costs, and
continuing to improve and enhance our retail and wholesale positions. More specifically, we intend to:

Optimize profitability by managing feedstock costs, product yields, and inventories through our refinery feedstock management program and our
system-wide distribution model. We seek to maximize refinery profitability by selecting crude oil and other feedstocks taking into account product demand and pricing in our market areas, price, quality and availability of various grades of crude
oil, product inventory levels and planned turnarounds of refinery units for maintenance. The combination of these factors is optimized by a sophisticated proprietary linear programming computer model, which selects the most profitable feedstock and
product mix. The linear programming model is continuously updated and improved to reflect changes in the product market place and in our refinerys processing capability

The accompanying consolidated financial statements and
supplementary information were prepared in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are discussed in Note 1 to the Consolidated Financial Statements, Item 8.
Inherent in the application of many of these accounting policies is the need for management to make estimates and judgments in the determination of certain revenues, expenses, assets and liabilities. As such, materially different financial results
can occur as circumstances change and additional information becomes known. The policies with the greatest potential effect on our results of operation and financial position include:

Revenue Recognition

Revenues for products sold by the wholesale segment are
recorded upon delivery of the products to our customers, at which time title to those products is transferred and when payment has either been received or collection is reasonably assured. At no point do we recognize revenue from the sale of product
prior to transfer of its title. Title to product is transferred to the customer at the shipping point, under predetermined contracts for sale at agreement upon or posted prices to customers of which collectability is reasonably assured.

Revenues for products sold by the retail segment are
recognized immediately upon sale to the customer. Revenue derived from other sources including freight charges are recognized when the related product revenue is recognized.

Collectability of Accounts Receivable

For accounts receivable we estimate the net collectability
considering both historical and anticipated trends relating to our customers and the possibility of non-collection due to their financial position. While such non-collections have been historically within our expectations and the allowances the
Company has established, the Company cannot guarantee that it will continue to experience non-collection rates that it has experienced in the past. A significant change in the financial position of our customers could have a material impact on the
quality of our accounts receivable and our future operating results.

In accordance with ACS 350, goodwill and intangible assets
deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests. We assess the impairment of goodwill and other indefinite-lived intangible assets annually.

The Company performed separate impairment tests on June 1, 2014 for its tradename and other intangible
assets using discounted and undiscounted cash flow methods, respectively. The fair value of the tradename and other intangible assets exceeded their respective carrying values. The Company has noted no subsequent indication that would require
testing the tradename and intangible assets for impairment.

There were no material changes in the gross carrying amounts of goodwill, tradename, or other intangible assets for fiscal 2014.

Long-Lived Assets

Whenever events or changes in circumstances indicate that
the carrying value of any of these assets may not be recoverable, the Company will assess the recoverability of such assets based upon estimated undiscounted cash flow forecasts. When any such impairment exists, the related assets will be written
down to fair value.

Value of Pension Assets

The Company maintains three noncontributory
defined benefit retirement plans for substantially all its employees. The assets of the plans are invested with a financial institution that follows an investment policy drafted by the Company. The investment guidelines provide a percentage range
for each class of assets to be managed by the financial institution. The historic performance of these asset classes supports the Companys expected return on the assets. The asset classes are rebalanced periodically should they fall outside
the range allocations.

The percentage of total
asset allocation range is as follows:

Asset Class

Minimum

Maximum

Equity

50

%

75

%

Fixed Income

20

%

50

%

Alternative Investments

0

%

15

%

Cash or Cash Equivalents

0

%

10

%

The discount rate utilized in
valuing the benefit obligations of the plans was derived from the rate of return on high quality bonds as of August 31, 2014. Similarly, the rate of compensation utilizes historic increases granted by the Company and the industry as well as
future compensation policies. See Note 10 to Consolidated Financial Statements, Item 8.

Environmental Remediation and Litigation Reserve Estimations

Management also makes judgments and estimates in recording
liabilities for environmental cleanup and litigation. Liabilities for environmental remediation are subject to change because of matters such as changes in laws, regulations and their interpretation; the effect of additional information on the
extent and nature of site contamination; and improvements in technology. Likewise, actual litigation costs can vary from estimates based on the facts and circumstance and application of laws in individual cases.

The above assessment of critical accounting policies is not
meant to be an all-inclusive discussion of the uncertainties to financial results that occur from the application of the full range of the Companys accounting policies. Materially different financial results could occur in the application of
other accounting policies as well. Likewise, materially different results can occur upon the adoption of new accounting standards promulgated by the various rule-making bodies.

The Company is engaged in the refining and marketing of petroleum products. In fiscal 2014, approximately 70% and 20% of the
Companys gasoline and distillate production, respectively, was sold through the Companys network of service stations and truck stops. The balances of the Companys refined products were sold to wholesale customers. In addition to
transportation and heating fuels, primarily gasoline and distillate, the Company is a major regional wholesale marketer of asphalt. The Company also sells convenience merchandise at convenience stores located at most of its service stations. The
Companys profitability is influenced by fluctuations in the market prices of crude oils and refined products. Although the Companys product sales mix helps to reduce the impact of large short-term variations in crude oil price, net sales
and costs of goods sold can fluctuate widely based upon fluctuations in crude oil prices. Specifically, the margins on wholesale gasoline and distillate tend to decline in periods of rapidly declining crude oil prices, while margins on asphalt,
retail gasoline and distillate tend to improve. During periods of rapidly rising crude oil prices, margins on wholesale gasoline and distillate tend to improve, while margins on asphalt and retail gasoline and distillate tend to decline. Gross
margins on the sale of convenience merchandise averaged 25.3% for fiscal 2014 and have been between 25.2% and 25.3% for the last five years and are essentially unaffected by variations in crude oil and petroleum products prices.

On March 6, 2013, the Company, through its subsidiary
United Biofuels, Inc. (UBI), acquired a partially completed 50 million gallon per year biodiesel facility in Brooklyn, New York as part of the acquisition by its parent company, United Refining, Inc., of certain assets of Metro Fuel
Oil Corp, and its affiliates. UBI has initiated the project to complete and modify the biodiesel plant. Commissioning the modified biodiesel plant is expected at the end of fiscal 2015. The remaining cost of the project is expected to be about $19
million.

The Company includes in costs of goods
sold operating expenses incurred in the refining process. Therefore, operating expenses reflect only selling, general and administrative expenses, including all expenses of the retail network, and depreciation and amortization.

Recent Developments

The Company continues to be impacted by the volatility in
petroleum markets in fiscal year 2015. From August 31, 2014 prices for NYMEX WTI crude have fallen $20.14, from $95.96 on August 31, 2014 to $75.82 on November 14, 2014. The lagged 3-2-1 crackspread as measured by the difference between the
price of crude oil contracts traded on the NYMEX for the preceding month to the prices of NYMEX gasoline and heating oil contracts in the current trading month, have been negatively affected through October. The Company uses a lagged
crackspread as a margin indicator as it reflects the time period between the purchase of crude oil and its delivery to the refinery for processing. Through November 14, 2014 the indicated lagged crackspread for the first quarter of fiscal
2015 was $9.24, a $9.35 or 50% decrease from the average for the fourth quarter of fiscal 2014. The indicated lagged crackspread for our second quarter ending February 28, 2015, calculated as of November 14, 2014 was $14.06.

On July 31, 2014, United Refining Company (the
Company) and Kiantone Pipeline Corporation, a subsidiary of the Company (Kiantone and, together with the Company, the Company Parties) on the one hand, and Enbridge Energy Limited Partnership (EELP)
and Enbridge Pipelines Inc. (EPI and, together with EELP, the Carriers), on the other hand, entered into a letter agreement (the Letter Agreement) with respect to approximately 88.85 miles of pipeline (Line
10) owned by the Carriers, which transports crude oil from Canada to the Companys Kiantone Pipeline in West Seneca, New York which serves the Companys refinery in Warren, Pennsylvania.

Pursuant to the Letter Agreement, the Company agreed to fund
certain integrity costs necessary to maintain Line 10 (the Integrity Costs), which aggregate $36 million for the calendar year 2014 and, were paid August 14, 2014. The Carriers will reconcile their actual expenses for the integrity
maintenance by June 30, 2015 and the Carriers will refund any excess payments made by the Company and the Company will fund the Carriers expenses in excess of the $36 million. Assuming the Company and the Carriers enter into a Put and
Call Agreement (as defined and discussed below) on or before December 31, 2014, for each subsequent calendar year

through the earlier of the expiration or closing of the purchase rights granted to the Company pursuant to the Put and Call Agreement, the Carriers will provide the Company with an invoice for
the Integrity Costs for such calendar year (Subsequent Year Integrity Costs). The Carriers actual expenses with respect to the integrity maintenance will be reconciled against the Subsequent Year Integrity Costs similarly to the
reconciliation for calendar year 2014.

In addition, the Company agreed to pay for half of the cost of replacing certain portions of Line 10 in accordance with a plan agreed to between the Company and the Carriers. The Company will pay 50% of
the estimated costs of the replacement project for each segment of Line 10 to be replaced (the Replacement Costs) within 30 days of its receipt of an invoice for the same, along with a project management fee of 2 1/4%. On September 2, 2014, the Company paid the Carriers $28 million plus a project management fee of
2 1/4% for 50% of a pipeline replacement project. Each Carrier will initially fund the remaining 50% of the Replacement Costs during construction, provided that the Company will reimburse the Carriers for
their actual cost of funds during the construction process. Once construction is complete and each replaced segment of Line 10 is put into service, and assuming the Company has not exercised its rights to purchase Line 10 pursuant to the Put and
Call Agreement (as defined and discussed below), the Company will repay the Carriers the 50% of the Replacement Costs they funded over a 10 year period.

Pursuant to the Letter Agreement, the Company and the
Carriers will negotiate the terms and conditions of a put and call option agreement for Line 10 (the Put and Call Agreement) on or before December 31, 2014. Pursuant to the Put and Call Agreement, the Company would have the right to
purchase the Line 10 Pipeline from the Carriers at any time during the next approximately eleven years and the Carriers would have the right to require the Company to purchase the Line 10 Pipeline over a two year period starting at the later of
approximately nine years or when all of the replacements are completed.

Kiantone, as the owner of the Kiantone Pipeline, has agreed to guaranty any and all payments due by the Company pursuant to the Letter Agreement.

Results of Operations

The Company is a petroleum refiner and marketer in its primary market area of Western New York and Northwestern Pennsylvania. Operations
are organized into two business segments: wholesale and retail.

The wholesale segment is responsible for the acquisition of crude oil, petroleum refining, supplying petroleum products to the retail segment and the marketing of petroleum products to wholesale and
industrial customers. The retail segment sells petroleum products under the Kwik Fill®, Citgo® and Keystone® brand names at a network of Company-operated retail units and convenience and grocery items through Company-owned gasoline stations and convenience stores under the
Red Apple Food Mart® and Country Fair® brand names.

A discussion and analysis of the factors contributing to the Companys results of
operations are presented below. The accompanying Consolidated Financial Statements and related Notes (See Item 8), together with the following information, are intended to supply investors with a reasonable basis for evaluating the
Companys operations, but should not serve as the only criteria for predicting the Companys future performance.

Retail Operations

Fiscal Year Ended August 31,

2014

2013

2012

(in thousands)

Net Sales

Petroleum

$

1,415,157

$

1,446,453

$

1,448,009

Merchandise and other

273,310

275,172

278,038

Total Net Sales

$

1,688,467

$

1,721,625

$

1,726,047

Costs of Goods Sold

$

1,529,463

$

1,569,040

$

1,574,474

Selling, general and administrative expenses

137,936

138,912

132,408

Depreciation and amortization expenses

6,566

6,153

5,691

Segment Operating Income

$

14,502

$

7,520

$

13,474

Retail Operating Data:

Petroleum Sales (thousands of gallons)

385,460

388,903

393,157

Petroleum margin (a)

$

89,950

$

83,298

$

81,406

Petroleum margin ($/gallon) (b)

.2334

.2142

.2071

Merchandise and other margins

$

69,052

$

69,291

$

70,168

Merchandise margin (percent of sales)

25.3

%

25.2

%

25.2

%

(a)

Includes the effect of intersegment purchases from our wholesale segment at prices which approximate market.

(b)

Company management calculates petroleum margin per gallon by dividing petroleum gross profit by petroleum sales volumes. Management uses fuel margin per gallon
calculations to compare profitability to other companies in the industry. Petroleum margin per gallon may not be comparable to similarly titled measures used by other companies in the industry.

Net Sales

2014 vs. 2013

Retail sales decreased during fiscal 2014 by $33.1 million or 1.9% for the comparable period in fiscal 2013 from $1,721.6 million to
$1,688.5 million. The decrease was primarily due to a decrease of $31.3 million in petroleum sales and $1.6 million in merchandise sales. The petroleum sales decrease resulted from a 3.4 million gallon or .9% decrease in retail petroleum volume
and a 1.3% decrease in retail selling prices per gallon.

2013 vs. 2012

Retail sales decreased during fiscal 2013 by $4.4 million or .3% for the comparable period in fiscal 2012 from $1,726.0 million to $1,721.6 million. The decrease was primarily due to a decrease of $1.6
million in petroleum sales and $2.8 million in merchandise sales. The petroleum sales decrease resulted from a 4.3 million gallon or 1.8% decrease in retail petroleum volume offset by a 1.0% increase in retail selling prices per gallon.

Retail costs of goods sold decreased during fiscal 2014 by
$39.6 million or 2.5% for the comparable period in fiscal 2013 from $1,569.0 million to $1,529.4 million. The decrease was primarily due to $51.2 million in petroleum volume and prices, and merchandise cost of $1.6 million offset by an increase of
$13.2 million in fuel tax. This tax increase was due primarily to the increase in Pennsylvania fuels tax.

2013 vs. 2012

Retail costs of goods sold decreased during fiscal 2013 by $5.4 million or .3% for the comparable period in fiscal 2012 from $1,574.4
million to $1,569.0 million. The decrease was primarily due to, freight cost of $9.7 million, merchandise cost of $2.0 million and fuel tax of $.4 million offset by an increase of $6.7 million in petroleum purchase prices.

Selling, General and Administrative Expenses

2014 vs. 2013

Retail Selling, General and Administrative
(SG&A) expenses decreased during fiscal 2014 by $1.0 million or .7% for the comparable period in fiscal 2013 from $138.9 million to $137.9 million. The decrease was due in part to a reduction in pension costs of $.5 million,
environmental costs of $.6 million, credit costs of $.4 million and payroll costs of $.5 million offset by an increase in maintenance costs of $1.0 million.

2013 vs. 2012

SG&A expenses increased during fiscal 2013 by $6.5 million or 4.9% for the comparable period in fiscal 2012 from $132.4 million to
$138.9 million. The increase was due to maintenance expenses of $1.0 million, payroll costs of $.8 million, pension and post-retirement costs of $.6 million, environmental costs of $.5 million, advertising costs of $.3 million, supplies of $.3
million, retail fixed asset retirements of $.9 million and a gain on the sale of fixed assets in fiscal 2012 that reduced SG&A during that period.

Wholesale Operations

Fiscal Year Ended August 31,

2014

2013

2012

(in thousands)

Net Sales (a)

$

1,750,751

$

1,959,628

$

2,004,878

Costs of Goods Sold (exclusive of depreciation, amortization and (gains) losses on derivative contracts)

Butane, propane, residual products, internally produced fuel and other

2,594

2,534

2,414

Total Product Yield

23,000

24,871

25,403

% Heavy Crude Oil of Total Refinery Throughput (a)

61

%

60

%

60

%

Crude throughput (thousand barrels per day) (b)

57.8

63.1

64.8

Product Sales (thousands of barrels) (c)

Gasoline and gasoline blendstock

5,457

6,152

6,142

Distillates

3,868

4,390

4,475

Asphalt

6,892

7,418

7,500

Other

772

844

836

Total Product Sales Volume

16,989

18,804

18,953

Product Sales (dollars in thousands) (c)

Gasoline and gasoline blendstock

$

631,746

$

740,233

$

726,001

Distillates

500,337

576,570

573,965

Asphalt

573,605

595,267

657,158

Other

45,063

47,558

47,754

Total Product Sales

$

1,750,751

$

1,959,628

$

2,004,878

(a)

The Company defines heavy crude oil as crude oil with an American Petroleum Institute specific gravity of 26 or less.

(b)

See also Item 1, Refining Operations.

(c)

Sources of total product sales include products manufactured at the refinery located in Warren, Pennsylvania and products purchased from third parties.

Net Sales

2014 vs. 2013

Wholesale sales decreased during fiscal 2014 by $208.9
million or 10.7% for the comparable period in fiscal 2013 from $1,959.6 million to $1,750.7 million. The decrease was due to a 1.1% decrease in wholesale prices and a 9.6% decrease in wholesale volume, primarily resulting from a planned refinery
turnaround during the third fiscal quarter. See also Item 1, Refining Operations.

2013 vs. 2012

Wholesale sales decreased during fiscal 2013 by $45.3 million or 2.3% for the comparable period in fiscal 2012 from $2,004.9 million to $1,959.6 million. The decrease was due to a 2.3% decrease in
wholesale prices and a .8% decrease in wholesale volume.

Costs of Goods Sold (exclusive of depreciation, amortization and (gains) losses on derivative contracts)

2014 vs. 2013

Wholesale costs of goods sold decreased during fiscal 2014
by $19.5 million or 1.2% for the comparable period in fiscal 2013 from $1,590.5 million to $1,571.0 million. The decrease in wholesale costs of goods sold during this period was primarily due to a decrease in cost of raw materials.

2013 vs. 2012

Wholesale costs of goods sold decreased during fiscal 2013
by $33.0 million or 2.0% for the comparable period in fiscal 2012 from $1,623.5 million to $1,590.5 million. The decrease in wholesale costs of goods sold during this period was primarily due to a decrease in cost of raw materials.

(Gains) Losses on Derivative Contracts

2014

During fiscal year 2014, the Company did not have any
outstanding derivative contracts.

2013

During fiscal year 2013, the Company
recognized a $2.3 million loss in costs and expenses in its Consolidated Statements of Operations.

Selling, General and Administrative Expenses

2014 vs. 2013

Wholesale SG&A expenses remained relatively constant during fiscal 2014 to the comparable period in fiscal 2013.

2013 vs. 2012

Wholesale SG&A expenses remained relatively constant
during fiscal 2013 to the comparable period in fiscal 2012.

Depreciation, Amortization and Asset Impairments

2014 vs. 2013

Depreciation, amortization and asset impairments increased during fiscal 2014 by $4.5 million for the comparable period for fiscal 2013
from $20.7 million to $25.2 million. This increase was due primarily to an increase in turnaround amortization.

2013 vs. 2012

Depreciation, amortization and asset impairments decreased during fiscal 2013 by $19.4 million for the comparable period for fiscal 2012
from $40.1 million to $20.7 million. This decrease was due primarily to a charge of $20.1 million resulting from the write-off of certain design costs associated with the Companys coker facility project in fiscal 2012. See Note 4 to the
Companys Consolidated Financial Statements, Item 8.

Net interest expense (interest expense less interest income)
decreased during fiscal 2014 by $12.8 million for the comparable period for fiscal 2013 from $39.1 million to $26.3 million. The decrease was due to the redemption of $127.8 million aggregate principal amount of Senior Notes due 2018 on
August 30, 2013.

2013 vs. 2012

Net interest expense (interest expense less
interest income) decreased during fiscal 2013 by $1.8 million for the comparable period for fiscal 2012 from $40.9 million to $39.1 million. The decrease was due to the discount on new Senior Notes and by reduced borrowing activity.

We operate in an
environment where our liquidity and capital resources are impacted by changes in the price of crude oil and refined petroleum products, availability of credit, market uncertainty and a variety of additional factors beyond our control. Included in
such factors are, among others, the level of customer product demand, weather conditions, governmental regulations, worldwide political conditions and overall market and economic conditions.

The following table summarizes selected measures of liquidity and capital sources:

August 31, 2014

August 31, 2013

(in thousands)

Cash and cash equivalents

$

99,037

$

158,537

Working capital

$

292,738

$

374,572

Current ratio

3.1

4.6

Debt

$

239,525

$

238,706

Primary sources of liquidity
have been cash and cash equivalents, cash flows from operations and borrowing availability under a revolving line of credit. We believe available capital resources will be adequate to meet our working capital, debt service, and capital expenditure
requirements for existing operations. We continuously evaluate our capital budget; however, management does not foresee any significant increase in maintenance and non-discretionary capital expenditures during fiscal 2015 that would impact future
liquidity or capital resources. Maintenance and non-discretionary capital expenditures have averaged approximately $6 million annually over the last three years for the refining and marketing operations and management currently projects this capital
expenditure to be approximately $8 - $10 million for fiscal 2015.

On June 18, 2013, the Company amended its Revolving Credit Facility (Amended and Restated Revolving Credit Facility) with PNC Bank, National Association as Administrator (the
Agent). The expiration date of the Amended and Restated Revolving Credit Facility was extended to November 29, 2017 and the commitment fee on the unused balance of the facility was reduced to 0.25%. The maximum facility commitment
remains at $175,000,000. See Note 8 to the Companys Consolidated Financial Statements, Item 8.

On August 30, 2013 the Company redeemed $127,750,000 aggregate principal amount of its outstanding $365,000,000 Senior Secured Notes
due 2018. Funding for the redemption was provided by the Companys sale of $141,163,750 of 6.00% Fixed Rate Cumulative Perpetual Preferred Stock Series A (Preferred Stock, see

Note 13) to URI, its parent (see Note 14). In accordance with the indenture governing the Senior Secured Notes due 2018, the Company obtained an opinion concerning the fairness from a financial
point of view of the issuance of the Preferred Stock to URI.

The Senior Secured Notes due 2018 were redeemed at a redemption price of 110.50% of the principal amount thereof, plus accrued and unpaid interest to August 30, 2014. In connection with the
redemption, a loss of $18,727,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $13,414,000, a write-off of deferred financing costs of $1,998,000 and a write-off of unamortized debt discount of $3,315,000.

Our cash and cash equivalents consist of bank
balances and investments in money market funds. These investments have staggered maturity dates, none of which exceed three months. They have a high degree of liquidity since the securities are traded in public markets. During fiscal 2014,
significant uses of cash are summarized in the table below under Significant Uses of Cash:

Significant Uses of Cash

The changes in cash for the fiscal year ended August 31, 2014 are described below.

The cash used in working capital is shown below:

Fiscal Year Ended

August 31, 2014

(in millions)

Cash used in working capital items:

Accounts receivable decrease

$

24.7

Refundable income tax decrease

14.9

Accounts payable increase

9.1

Sales, use and fuel taxes payable increase

1.3

Amounts due from affiliated companies, net

1.1

Inventory increase

(20.5

)

Prepaid expense increase

(17.0

)

Prepaid income taxes increase

(13.7

)

Income taxes payable decrease

(8.6

)

Total change

$

(8.7

)

The decrease of available
cash on hand of $59.5 million includes $1.4 million of net cash received from proceeds of long-term debt, relating to capital leases. Other cash uses included:



Fund operating activities used in working capital items of $8.7 million



Fund capital expenditures and deferred turnaround costs of $91.5 million



Fund deferred integrity and replacement cost of $36.8 million



Distribution to parent under tax sharing agreement of $3.0 million



Dividends to preferred stockholder and common stockholder of $38.9 million



Scheduled long-term debt repayments of $2.0 million

We require a substantial investment in working capital which
is susceptible to large variations during the year resulting from purchases of inventory and seasonal demands. Inventory purchasing activity is a function of sales activity and turnaround cycles for the different refinery units.

Future liquidity, both short and long-term, will continue to be primarily dependent on
realizing a refinery margin sufficient to cover fixed and variable expenses, including planned capital expenditures. We expect to be able to meet our working capital, capital expenditure, contractual obligations, letter of credit and debt service
requirements out of cash flow from operations, cash on hand and available borrowings under our Amended and Restated Revolving Credit Facility of $175,000,000. This provides the Company with flexibility relative to its cash flow requirements in light
of market fluctuations, particularly involving crude oil prices and seasonal business cycles and will assist the Company in meeting its working capital, ongoing capital expenditure needs and for general corporate purposes. The agreement expires on
May 18, 2016. Under the Amended and Restated Revolving Credit Facility, the applicable margin is calculated on the average unused availability as follows: (a) for base rate borrowing, at the greater of the Agent Banks prime rate the
Federal Funds Open Rate plus 1.5%; or the Daily LIBOR rate plus 3%; plus an applicable margin of 0% to .5%; (b) for euro-rate based borrowings, at the LIBOR Rate plus an applicable margin of 2.75% to 3.25%. The Agent Banks prime rate at
August 31, 2014 was 3.25%.

The Revolving
Credit Facility is secured primarily by certain cash accounts, accounts receivable and inventory. Until maturity, we may borrow on a borrowing base formula as set forth in the facility.

We had outstanding letters of credit of $8,752,000 as of August 31, 2014. As of August 31, 2014, we
had no outstanding borrowings under the Revolving Credit Facility resulting in net availability of $166,248,000.

The Companys 10.5% First Senior Secured Notes mature in 2018, at which time the Company will either have to pay the principal amount
in full or refinance the Notes.

The following is
a summary of our significant contractual cash obligations for the periods indicated that existed as of August 31, 2014 and is based on information appearing in the Notes to the Consolidated Financial Statements in Item 8:

Payments due by period

Contractual Obligations

Total

Less Than1 Year

1  3Years

3  5Years

More than5 Years

(in thousands)

Long-term debt

$

244,561

$

1,551

$

2,912

$

237,651

$

2,447

Operating leases

68,879

13,126

23,228

16,130

16,395

Interest on 10.5% Senior Notes due2/28/2018 (a) (b) (c)

87,189

24,911

49,822

12,456



Total contractual cash obligations (d)

$

400,629

$

39,588

$

75,962

$

266,237

$

18,842

(a)

On March 8, 2011, the Company sold $365,000,000 of the Senior Secured Notes due 2018 for $352,020,600, resulting in original issue discount of $12,979,400, which
will be amortized over the life of the Senior Secured Notes due 2018 using the interest method and is not reflected in this table. The net proceeds of the offering of $344,249,000 were used to fund the tender offer for all of its outstanding Senior
Notes due 2012, pay accrued interest of $3,400,000 there on and a redemption premium related thereto. See Note 9 to Consolidated Financial Statements, Item 8.

(b)

On August 30, 2013 the Company redeemed $127,750,000 aggregate principal amount of its outstanding $365,000,000 Senior Secured Notes due 2018. The Senior Secured
Notes due 2018 were redeemed at a redemption price of 110.50% of the principal amount thereof, plus accrued and unpaid interest to August 30, 2013. In connection with the redemption, a loss of $18,727,000 on the early extinguishment of debt was
recorded consisting of a redemption premium of $13,414,000, a write-off of deferred financing costs of $1,998,000 and a write-off of unamortized debt discount of $3,315,000.

(c)

The above does not reflect our long term Amended and Restated Revolving Credit Facility, which had a balance of $0 as of August 31, 2014. The applicable margin
varies with our facilitys average unused availability calculation See Notes 8 and 9 to Consolidated Financial Statements, Item 8.

Although we are not aware of any pending circumstances which would change our expectations,
changes in the tax laws, the imposition of and changes in federal and state clean air and clean fuel requirements and other changes in environmental laws and regulations may also increase future capital expenditure levels. Future capital
expenditures are also subject to business conditions affecting the industry. We continue to investigate strategic acquisitions and capital improvements to our existing facilities.

Federal, state and local laws and regulations relating to the
environment affect nearly all of our operations. As is the case with all the companies engaged in similar industries, we face significant exposure from actual or potential claims and lawsuits involving environmental matters. Future expenditures
related to environmental matters cannot be reasonably quantified in many circumstances due to the uncertainties as to required remediation methods and related clean-up cost estimates. We cannot predict what additional environmental legislation or
regulations will be enacted or become effective in the future or how existing or future laws or regulations will be administered or interpreted with respect to products or activities to which they have not been previously applied.

Related Party Transactions

See Item 13, Certain Relationships and Related
Transactions.

Seasonal Factors

Seasonal factors affecting the Companys business may
cause variation in the prices and margins of some of the Companys products. For example, demand for gasoline tends to be highest in spring and summer months, while demand for home heating oil and kerosene tends to be highest in winter months.

As a result, the margin on gasoline prices versus
crude oil costs generally tends to increase in the spring and summer, while margins on home heating oil and kerosene tend to increase in winter.

Inflation

The effect of inflation on the Company has not been significant during the last five fiscal years.

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update
No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU No. 2014-09). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most
industry-specific guidance throughout the Industry Topics of the Codification. Additionally, ASU No. 2014-09 supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts.
Under ASU No. 2014-09, an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or
services. ASU No. 2014-09 also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets
recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 is effective for interim and annual periods beginning after December 15, 2016, with early application prohibited. ASU No. 2014-09 allows for either
full retrospective or modified retrospective adoption. The Company is evaluating the transition method that will be elected and the potential effects of adopting the provisions of ASU No. 2014-09.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We use our Amended and Restated Revolving Credit Facility to
finance a portion of our operations. These on-balance sheet financial instruments, to the extent they provide for variable rates, expose us to interest rate risk resulting from changes in the PNC Prime rate, the Federal Funds rate or the LIBOR rate.

We have exposure to price fluctuations of crude oil and refined products. We do not manage
the price risk related to all of our inventories of crude oil and refined products with a permanent formal hedging program, but we do manage our risk exposure by managing inventory levels and by selectively applying hedging activities. At
August 31, 2014, the Company had no future positions hedging crude or product inventories.

From time to time the Company uses derivatives to reduce its exposure to fluctuations in crude oil purchase costs and refining margins. Derivative products, historically crude oil option contracts (puts)
and crackspread option contracts have been used to hedge the volatility of these items. The Company does not enter such contracts for speculative purposes. The Company accounts for changes in the fair value of its contracts by marking them to market
and recognizing any resulting gains or losses in its statement of operations. The Company includes the carrying amounts of the contracts in prepaid expenses and other assets or accounts payable in its Consolidated Balance Sheet.

At August 31, 2014, we were exposed to the risk of
market price declines with respect to a substantial portion of our crude oil and refined product inventories.

We have audited the accompanying consolidated
balance sheets of United Refining Company and subsidiaries as of August 31, 2014 and 2013, and the related consolidated statements of income, comprehensive income, stockholders equity and cash flows for each of the three years in the
period ended August 31, 2014. These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of United Refining Company and subsidiaries as of August 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended August 31, 2014, in conformity with accounting principles
generally accepted in the United States of America.

Description of Business and Summary of Significant Accounting Policies

Description of Business and Basis
of Presentation

The consolidated
financial statements include the accounts of United Refining Company and its subsidiaries, United Refining Company of Pennsylvania and its subsidiaries, United Biofuels, Inc. and Kiantone Pipeline Corporation (collectively, the Company).
All significant intercompany balances and transactions have been eliminated in consolidation.

The Company is a petroleum refiner and marketer in its primary market area of Western New York and Northwestern Pennsylvania. Operations are organized into two business segments: wholesale and retail.

The wholesale segment is
responsible for the acquisition of crude oil, petroleum refining, supplying petroleum products to the retail segment and the marketing of petroleum products to wholesale and industrial customers. The retail segment operates a network of Company
operated retail units under the Red Apple Food Mart® and Country Fair® brand names selling petroleum products under the Kwik Fill®, Citgo® and Keystone® brand names, as well as convenience and grocery items.

The Company is a wholly-owned subsidiary of United Refining, Inc. (URI), a wholly-owned subsidiary
of United Acquisition Corp., which in turn is a wholly-owned subsidiary of Red Apple Group, Inc. (the Parent).

Cash and Cash Equivalents

For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investment securities with maturities
of three months or less at date of acquisition to be cash equivalents.

Derivative Instruments

From time to time the Company uses derivatives to reduce its exposure to fluctuations in crude oil purchase costs and refining margins. Derivative products, historically crude oil option contracts (puts)
and crackspread option contracts have been used to hedge the volatility of these items. The Company does not enter such contracts for speculative purposes. The Company accounts for changes in the fair value of its contracts by marking them to market
and recognizing any resulting gains or losses in its Statement of Operations. The Company includes the carrying amounts of the contracts in derivative liability in its Consolidated Balance Sheet.

At August 31, 2014, the Company had no derivative
instruments outstanding as part of its risk management strategy.

For the fiscal years ended August 31, 2014, 2013 and 2012 the Company recognized $0, $2,319,000 and $(28,848,000) of losses (gains) in costs and expenses in its Consolidated Statements of Operations.

Inventories and Exchanges

Inventories are stated at the lower of
cost or market, with cost being determined under the Last-in, First-out (LIFO) method for crude oil and petroleum product inventories and the First-in, First-out (FIFO) method for merchandise. Supply inventories are stated at either lower of cost or
market or replacement cost and include various parts for the refinery operations. If the cost of inventories exceeds their market value, provisions are made currently for the difference between the cost and the market value.

Property, plant and equipment is stated at cost and
depreciated by the straight-line method over the respective estimated useful lives. Routine current maintenance, repairs and replacement costs are charged against income. Expenditures which materially increase values expand capacities or extend
useful lives are capitalized. A summary of the principal useful lives used in computing depreciation expense is as follows:

Estimated UsefulLives (Years)

Refining

20-30

Marketing

15-30

Transportation

20-30

Leases

The Company leases land, buildings, and
equipment under long-term operating and capital leases and accounts for the leases in accordance with ASC 360-10-30-8. Lease expense for operating leases is recognized on a straight-line basis over the expected lease term. The lease term begins on
the date the Company has the right to control the use of the leased property pursuant to the terms of the lease.

Deferred Integrity and Replacement Costs

The Company and Kiantone Pipeline Corporation, a subsidiary
of the Company, and Enbridge Energy Limited Partnership (EELP) and Enbridge Pipelines, Inc. (EPI and, together with EELP, the Carriers), entered into a letter agreement (the Letter Agreement) with respect to
pipeline (Line 10) owned by the Carriers, which transports crude oil from Canada to the Companys Kiantone Pipeline. Pursuant to the Letter Agreement, the Company agreed to fund certain integrity costs necessary to maintain Line 10,
and agreed to pay for half the cost of replacing certain portions of Line 10.

The integrity and replacement costs, are deferred when incurred and amortized on a straight-line basis over the period of benefit, which is approximately 11 years. As of August 31, 2014 and 2013, net
deferred integrity and replacement costs amounted to $64,916,000 and $0, respectively. Amortization expense of $524,000, $0 and $0 is included in Costs of Goods Sold for the fiscal years ended August 31, 2014, 2013 and 2012, respectively.

Deferred Maintenance Turnarounds

The cost of maintenance turnarounds,
which consist of complete shutdown and inspection of significant units of the refinery at intervals of two or more years for necessary repairs and replacements, are deferred when incurred and amortized on a straight-line basis over the period of
benefit, which ranges from 2 to 10 years. As of August 31, 2014 and 2013, deferred turnaround costs included in Deferred Turnaround Costs and Other Assets, amounted to $39,352,000 and $8,476,000, which are net of accumulated amortization of
$32,760,000 and $32,202,000, respectively. Amortization expense included in Costs of Goods Sold for the fiscal years ended August 31, 2014, 2013 and 2012 amounted to $11,319,000, $7,082,000 and $7,198,000, respectively.

Amortizable Intangible Assets

The Company amortizes identifiable intangible assets such as
brand names, non-compete agreements, leasehold covenants and deed restrictions on a straight line basis over their estimated useful lives which range from 5 to 25 years.

Revenue Recognition

Revenues for products sold by the wholesale segment are
recorded upon delivery of the products to our customers, at which time title to those products is transferred and when payment has either been received or collection is reasonably assured. At no point do we recognize revenue from the sale of
products prior to the

transfer of its title. Title to product is transferred to the customer at the shipping point, under pre-determined contracts for sale at agreed upon or posted prices to customers of which
collectability is reasonably assured. Revenues for products sold by the retail segment are recognized immediately upon sale to the customer. Included in Net Sales and Costs of Goods Sold are consumer excise taxes of $238,332,000, $225,125,000 and
$225,605,000 for the years ended August 31, 2014, 2013 and 2012, respectively.

Cost Classifications

Our Costs of Goods Sold (which excludes depreciation and amortization on property, plant and equipment and (gains) or losses on derivative contracts) include Refining Cost of Products Sold and related
Refining Operating expenses.

Refining Cost of
Products Sold includes cost of crude oil, other feedstocks, blendstocks, the cost of purchased finished products, amortization of turnaround costs, transportation costs and distribution costs. Retail Cost of Products Sold include cost for motor
fuels and for merchandise. Motor fuel cost of products sold represents net cost for purchased fuel. Merchandise cost of products sold includes merchandise purchases, net of merchandise rebates and inventory shrinkage. Wholesale cost of products sold
includes the cost of fuel and lubricants, transportation and distribution costs and labor.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Companys results of operations are
included in the consolidated Federal income tax return of the Parent and separately in various state jurisdictions. Income taxes are calculated on a separate return basis with consideration of the Tax Sharing Agreement between the Parent and its
subsidiaries. The Company is open to examination for tax years 2002 through 2012, due to the carryback of net operating losses, and there was a federal tax audit for the tax years 2007 through 2010 which has been settled. There are currently state
tax audits in process and there are unsettled income tax assessments outstanding in the amount of $45,000. The Companys policy is to recognize interest and penalties accrued on any unrecognized tax positions as a component of interest expense,
net and other, net, respectively. No amounts of such expenses are currently accrued.

Post-Retirement Healthcare and Pension Benefits

The Company provides post-retirement healthcare benefits to salaried and certain hourly employees that retired prior to September 1,
2010. The benefits provided are hospitalization and medical coverage for the employee and spouse until age 65. Benefits continue until the death of the retiree, which results in the termination of benefits for all dependent coverage. If an employee
leaves the Company as a terminated vested member of a pension plan prior to normal retirement age, the person is not entitled to any post-retirement healthcare benefits. Benefits payable under this program are secondary to any benefits provided by
Medicare or any other governmental programs.

In June 2010, the Company announced changes to the healthcare and pension plans provided
to salaried employees. Effective September 1, 2010, postretirement medical benefits for new hires and active salaried employees retiring after September 1, 2010 were eliminated. Additionally, effective January 1, 2011,
deductibles and co-payments were added to the medical benefits plan for all active and retired employees. For salaried employees meeting certain age and service requirements, the Company contributes a defined dollar amount towards the cost
of retiree healthcare based upon the employees length of service. Similarly, effective August 31, 2010, benefits under the Companys defined benefit pension plan were frozen for all salaried employees, including the
Companys Chief Executive Officer and Chief Financial Officer. The Company will provide an enhanced contribution under its defined contribution 401(k) plan as well as a transition contribution for older employees. The changes
made for the salary group described above were also incorporated into the collective bargaining agreement reached with the International Union of Operating Engineers, Local No.95 effective February 1, 2012.

The Company accrues post-retirement benefits other than
pensions, during the years that the employee renders the necessary service, of the expected cost of providing those benefits to an employee and the employees beneficiaries and covered dependents.

Use of Estimates

The preparation of consolidated financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Allowance for Doubtful Accounts

The Company records an allowance for doubtful accounts based
on specifically identified amounts that we believe to be uncollectible. The Company also recorded additional allowances based on historical collection experience and its assessment of the general financial conditions affecting the customer base.
Senior management reviews accounts receivable on a weekly basis to determine if any receivables will potentially be uncollectible. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

Concentration Risks

Financial instruments which potentially subject the Company
to concentrations of credit risk consist principally of temporary cash investments.

The Company places its temporary cash investments with quality financial institutions. At times, such investments were in excess of FDIC insurance limits. The Company has not experienced any losses in
such accounts.

The Company purchased
approximately 14% and 9% of its cost of goods sold from one vendor during the fiscal years ended August 31, 2014 and 2013, respectively. The Company is not obligated to purchase from this vendor, and, if necessary, there are other vendors from
which the Company can purchase crude oil and other petroleum based products. The Company had $0 in accounts payable for the years ended August 31, 2014 and 2013 to these vendors.

The Company expenses environmental expenditures related to
existing conditions resulting from past or current operations and from which no current or future benefit is discernible. Expenditures, which extend the life of the related property or mitigate or prevent future environmental contamination are
capitalized. The Company determines its liability on a site by site basis and records a liability at the time when it is probable and can be reasonably estimated. The Companys estimated liability is reduced to reflect the anticipated
participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. The estimated liability of the
Company is not reduced for possible recoveries from insurance carriers and is recorded in accrued liabilities.

Goodwill and Other Non-Amortizable Assets

In accordance with ASC 350, goodwill and intangible assets
deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests in accordance with ASC 350. Other definite lived intangible assets continue to be amortized over their estimated useful lives.

The Company performed separate impairment tests for its
goodwill and tradename using the discounted cash flow method. The fair value of the Companys reporting units exceeded their carrying values. The fair value of the tradename exceeded its carrying value. The Company has noted no subsequent
indication that would require testing its goodwill and tradename for impairment.

Long-Lived Assets

Whenever events or changes in circumstances indicate that the carrying value of any of these assets (other than goodwill and tradename) may not be recoverable, the Company will assess the recoverability
of such assets based upon estimated undiscounted cash flow forecasts. When any such impairment exists, the related assets will be written down to fair value.

Other Comprehensive (Loss) Income

The Company reports comprehensive (loss) income in accordance with ASC 220-10. ASC 220-10 establishes guidelines for the reporting and
display of comprehensive (loss) income and its components in financial statements. Comprehensive (loss) income includes charges and credits to equity that is not the result of transactions with the shareholder. Included in other comprehensive loss
for the Company is a charge for unrecognized post-retirement costs, which is net of taxes in accordance with ASC 715. The accumulated other comprehensive loss balance is made up entirely of unrecognized post-retirement costs.

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update
No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU No. 2014-09). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most
industry-specific guidance throughout the Industry Topics of the Codification. Additionally, ASU No. 2014-09 supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts.
Under ASU No. 2014-09, an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or
services. ASU No. 2014-09 also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and

cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU
No. 2014-09 is effective for interim and annual periods beginning after December 15, 2016, with early application prohibited. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption. The Company is
evaluating the transition method that will be elected and the potential effects of adopting the provisions of ASU No. 2014-09.

Reclassification

Certain amounts in the prior years consolidated financial statements have been reclassified to conform with the presentation in the
current year.

2.

Accounts Receivable, Net

As of August 31, 2014 and 2013,
accounts receivable were net of allowance for doubtful accounts of $1,070,000 and $1,800,000, respectively.

3.

Inventories

Inventories consist of the following:

August 31,

2014

2013

(in thousands)

Crude Oil

$

36,667

$

21,344

Petroleum Products

63,252

60,094

Total @ LIFO

99,919

81,438

Merchandise

23,983

24,002

Supplies

27,570

25,526

Total @ FIFO

51,553

49,528

Total Inventory

$

151,472

$

130,966

Included in petroleum product
inventories are exchange balances either held for or due from other petroleum marketers. These balances are not significant.

The Company does not own sources of crude oil and depends on outside vendors for its needs.

As of August 31, 2014 and 2013, the replacement cost of
LIFO inventories exceeded their LIFO carrying values by approximately $109,711,000, and $108,984,000, respectively. For the fiscal years ended August 31, 2014 and 2013, the Company recorded a charge to Costs of Goods Sold from a LIFO layer
liquidation of $1,095,000 and $6,507,000, respectively.

On March 6, 2013, the
Company, through its subsidiary United Biofuels, Inc. (UBI), acquired a partially completed 50 million gallon per year biodiesel facility in Brooklyn, New York as part of the acquisition by its parent company, United Refining, Inc.,
of certain assets of Metro Fuel Oil Corp, and its affiliates. UBI has initiated the project to complete and modify the biodiesel plant. The Company paid $9,800,000 for such biodiesel facility. Due to having a common owner, the Company
recorded the facility based on the carrying value of its parent or $20,735,000. The difference between the carrying value and the amount paid by the Company has been recorded as a capital contribution net of the tax effect of
$4,960,000. Commissioning the modified biodiesel plant is expected at the end of fiscal 2015. As of August 31, 2014 the remaining cost of the project is expected to be about $19,000,000.

During the fiscal year ended August 31, 2012, the
Company re-evaluated its efforts to construct a Coker Facility and determined that it was necessary to suspend the project indefinitely. As a result, it recorded a charge of $20,122,000 which is included in depreciation, amortization and asset
impairments associated with the design of the facility. Management believes that the remainder of the material costs amounting to $6,964,000 will be utilized for other projects within the refinery and the Company will begin depreciating the assets
over the estimated remaining life of approximately 20 years. The Company also placed into service $2,700,000 of Coker related assets associated with a different project.

5.

Goodwill and Intangible Assets

As of August 31, 2014 and 2013, the
Companys trade name, goodwill and amortizable intangible assets, included in the Companys retail segment, were as follows:

Amortization expense for the fiscal years ended August 31, 2014, 2013 and 2012
amounted to $106,000, $107,000 and $106,000, respectively.

Amortization expense for intangible assets subject to amortization for each of the years in the five-year period ending August 31, 2019 is estimated to be $106,000 in each year.

6.

Accrued Liabilities

Accrued liabilities include the
following:

August 31,

2014

2013

(in thousands)

Interest

$

104

$

106

Payrolls and benefits

16,972

17,012

Other

1,615

1,597

$

18,691

$

18,715

7.

Leases

The Company occupies premises, primarily
retail gas stations and convenience stores and office facilities under long-term leases which require minimum annual rents plus, in certain instances, the payment of additional rents based upon sales. The leases generally are renewable for one to
three five-year periods.

As of August 31,
2014 and 2013, capitalized lease obligations, included in long-term debt, amounted to $3,021,000 and $3,124,000, respectively, inclusive of current portion of $109,000 and $102,000, respectively. The related assets (retail gas stations and
convenience stores) as of August 31, 2014 and 2013 amounted to $2,620,000 and $2,805,000, net of accumulated amortization of $869,000 and $684,000, respectively. Lease amortization amounting to $185,000, $145,000 and $89,000 for the years ended
August 31, 2014, 2013 and 2012, respectively is included in depreciation and amortization expense.

Future minimum lease payments as of August 31, 2014 are summarized as follows:

Net rent expense for operating leases amounted to $13,243,000, $13,135,000 and
$12,502,000 for the years ended August 31, 2014, 2013 and 2012, respectively.

8.

Credit Facility

On June 18, 2013, the Company
amended its Revolving Credit Facility (Amended and Restated Revolving Credit Facility) with PNC Bank, National Association as Administrator (the Agent). The expiration date of the Amended and Restated Revolving Credit
Facility was extended to November 29, 2017 and the commitment fee on the unused balance of the facility was reduced to 0.25%. The maximum facility commitment remains at $175,000,000 and interest will now be calculated as follows: a) for base
rate borrowings, at the greater of the Agents prime rate, federal funds open rate plus 0.5% or the daily LIBOR rate plus 1.0% plus the applicable margin of .75% to 1.75% and (b) for euro-rate borrowings, at the LIBOR rate plus an
applicable margin of 2.25% to 3.25%. The applicable margin will vary depending on a formula calculating the Companys unused availability under the facility.

The Amended and Restated Revolving Credit Facility continues
to be secured primarily by certain cash accounts, accounts receivable and inventory which amounted to $289,955,000 as of August 31, 2014. Until maturity, the Company may borrow on a borrowing base formula as set forth in the facility. The
participating banks in the Amended and Restated Revolving Credit Facility are PNC Bank, National Association, Bank of America, N.A., Manufacturers and Traders Trust Company, and Bank Leumi USA.

As of August 31, 2014 and 2013, there were no Base-Rate
borrowings nor Euro-Rate borrowings outstanding under the agreement. $8,753,000 and $6,533,000 of letters of credit were outstanding under the agreement as of August 31, 2014 and 2013, respectively. The weighted average interest rate for
Base-Rate borrowing for the years ended August 31, 2014 and 2013 was 4.00% and 0%, respectively. The weighted average interest rate for Euro-Rate borrowings for the years ended August 31, 2014 and 2013 was 0%. The Company pays a commitment
fee of .25% per annum on the unused balance of the facility. All bank related charges are included in Other, net in its Consolidated Statements of Operations.

9.

Long-Term Debt

On August 30, 2013 the Company
redeemed $127,750,000 aggregate principal amount of its outstanding $365,000,000 Senior Secured Notes due 2018. Funding for the redemption was provided by the Companys sale of $141,163,750 aggregate principal amount of 6.00% Fixed Rate
Cumulative Perpetual Preferred Stock Series A to URI, its parent (see Note 14). In accordance with the indenture governing the Senior Secured Notes due 2018, the Company obtained an opinion concerning the fairness from a financial point of view with
the issuance of the Preferred Stock to URI.

The
Senior Secured Notes due 2018 were redeemed at a redemption price of 110.50% of the principal amount thereof, plus accrued and unpaid interest to August 30, 2013. In connection with the redemption, a loss of $18,727,000 on the early
extinguishment of debt was recorded consisting of a redemption premium of $13,413,000, a write-off of deferred financing costs of $1,999,000 and a write-off of unamortized debt discount of $3,315,000.

On March 8, 2011, the Company sold
$365,000,000 of Senior Secured Notes due 2018 for $352,020,600, resulting in original issue discount of $12,979,400, which is being amortized over the life of the Senior Secured Notes due 2018 using the interest method. The net proceeds of the
offering of $344,249,000 were used to retire all of its outstanding 10 1/2% Senior Notes due 2012, pay accrued interest of $3,400,000 and a redemption premium related thereto. A loss of $1,245,000
on the early extinguishment of debt was recorded consisting of a

redemption premium of $915,000, a write-off of unamortized net debt premium of $1,153,000 and a write-off of deferred financing costs of $1,483,000. The Senior Secured Notes due 2018 are
guaranteed on an unsecured basis by all of the Companys domestic subsidiaries existing at March 8, 2011. The Senior Secured Notes due 2018 are secured on a first-priority basis by the Companys assets comprising its refinery located
in Warren, Pennsylvania and the capital stock of its pipeline subsidiary, subject to permitted liens. The Senior Secured Notes due 2018 will rank equally with all of the Companys existing and future senior indebtedness that is not subordinate
in right of payment to the Senior Secured Notes due 2018.

Both the Indenture of the Senior Secured Notes and the facility (See Note 8 to Consolidated Financial Statements) require that the Company maintain certain financial covenants. The facility
requires the Company to meet certain financial covenants, as defined in the facility, a minimum Fixed Charge Coverage Ratio and a minimum Consolidated Net Worth. In addition, the facility limits the amount the Company can distribute for capital and
operating leases. Both the facility and the Indenture of the Senior Secured Notes restrict the amount of dividends payable and the incurrence of additional Indebtedness. As of August 31, 2014 the Company is in compliance with covenants under
the facility and the Indenture.

The following financing costs have been deferred and are being amortized to expense over
the term of the related debt:

August 31,

2014

2013

(in thousands)

Beginning balance

$

8,881

$

10,880

Current year additions





Total financing costs

8,881

10,880

Less:

Deferred financing costs associated with debt retirement



1,999

Accumulated amortization

5,306

4,078

$

3,575

$

4,803

Amortization expense for the
fiscal years ended August 31, 2014, 2013 and 2012 amounted to $1,228,000, $1,669,000 and $1,667,000, respectively.

10.

Employee Benefit Plans

The Company sponsors three defined
benefit plans and seven defined contribution plans covering substantially all its full time employees. The benefits under the defined benefit plans are based on each employees years of service and compensation. Effective February 1, 2012
benefits under the Companys defined benefit pension plan for hourly employees were frozen. Additionally, effective August 31, 2010 benefits under the Companys defined benefit pension plan were frozen for all salaried employees,
including the Companys Chief Executive Officer and Chief Financial Officer. The Company will provide enhanced contributions under its defined contribution 401(k) plan as well as a transition contribution for older employees. The Companys
policy is to contribute the minimum amounts required by the Employee Retirement Income Security Act of 1974 (ERISA), as amended and any additional amounts for strategic financial purposes or to meet other goals relating to plan funded status. The
assets of the plans are invested in an investment trust fund and consist of interest-bearing cash, separately managed accounts and bank common/collective trust funds.

In addition to the above, the Company provides certain
post-retirement healthcare benefits to salaried and certain hourly employees that retired prior to September 1, 2010. These post-retirement benefit plans are unfunded and the costs are paid by the Company from general assets.

Net periodic pension cost and post-retirement healthcare
benefit cost consist of the following components for the years ended August 31, 2014, 2013 and 2012:

The Company adopted ASC 715-30-25 effective August 31, 2007. ASC 715-30-25 requires
an employer to recognize the funded status of each of its defined pension and postretirement benefit plans as a net asset or liability in its statement of financial position with an offsetting amount in accumulated other comprehensive income, and to
recognize changes in that funded status in the year in which changes occur through comprehensive income.

Other changes in plan assets and benefit obligation recognized in Other Comprehensive Income consist of the following for the fiscal years
ended August 31, 2014 and 2013 (in thousands):

Pension Benefits

Other Post-RetirementBenefits

2014

2013

2014

2013

Current year actuarial (gain) / loss

$

4,702

$

(11,796

)

$

162

$

(7,322

)

Amortization of actuarial gain / (loss)

(697

)

(1,209

)

(5,073

)

(7,056

)

Current year prior service (credit) / cost





(2,537

)



Amortization of prior service credit / (cost)



(1

)

6,933

6,933

Total recognized in other comprehensive (income) / loss

$

4,005

$

(13,006

)

$

(515

)

$

(7,445

)

Total recognized in net periodic benefit cost and other comprehensive (income)/loss

$

4,934

$

(11,793

)

$

471

$

(4,498

)

The following table
summarizes the change in benefit obligations and fair values of plan assets for the years ended August 31, 2014 and 2013:

Note: For plans with assets less than the accumulated benefit obligation (ABO), the aggregate ABO is $119,209,000 and
$107,117,000, while the aggregate asset value is $93,245,000 and $80,224,000 for the years ended August 31, 2014 and 2013, respectively.

Amounts recognized in
Accumulated Other Comprehensive Income:

Pension Benefits

Other Post-RetirementBenefits

2014

2013

2014

2013

(in thousands)

Accumulated net actuarial loss

$

(29,411

)

$

(25,406

)

$

(29,465

)

$

(34,376

)

Accumulated prior service cost





42,722

47,117

Net amount recognized, before tax effect

$

(29,411

)

$

(25,406

)

$

13,257

$

12,741

The preceding table presents
two measures of benefit obligations for the pension plans. Accumulated benefit obligation (ABO) generally measures the value of benefits earned to date. Projected benefit obligation (PBO) also includes the effect of assumed future compensation
increases for plans in which benefits for prior service are affected by compensation changes. Each of the three pension plans, whose information is aggregated above, have asset values less than these measures. Plan funding amounts are calculated
pursuant to ERISA and Internal Revenue Code rules. The postretirement benefits are not funded.

Weighted average assumptions used to determine year end benefit obligations:

Pension Benefits

Other Post-RetirementBenefits

2014

2013

2014

2013

Discount rate

4.00% - 4.20%

4.80% - 5.00%

3.85%

4.60%

Rate of compensation increase

3.00%

3.00%

N/A

N/A

Health care cost trend

Initial trend

N/A

N/A

7.00%

7.00%

Ultimate trend

N/A

N/A

5.00%

5.00%

Year ultimate reached

N/A

N/A

2025

2022

The discount rate assumptions
at August 31, 2014 and 2013 were determined independently for each plan. A yield curve was produced for a universe containing the majority of U.S.-issued Aa-graded corporate bonds, all of which were non-callable (or callable with make-whole
provisions). For each plan, the discount rate was developed as the level equivalent rate that would produce the same present value as that using spot rates aligned with the projected benefit payments.

For measurement purposes, the
assumed annual rate of increase in the per capita cost of covered medical and dental benefits was 7.00% and 7.25% for 2014 and 2013, respectively. The rates were assumed to decrease gradually to 5% for medical benefits until 2022 and remain at that
level thereafter. The healthcare cost trend rate assumption has a significant effect on the amounts reported. To illustrate, a 1 percentage point change in the assumed healthcare cost trend rate would have the following effects:

1% PointIncrease

1% PointDecrease

(in thousands)

Effect on total of service and interest cost components

$

116

$

(102

)

Effect on post-retirement benefit obligation

1,804

(1,667

)

The expected return on plan
assets is a long-term assumption established by considering historical and anticipated returns of the asset classes invested in by the pension plans and the allocation strategy currently in place among those classes.

A reconciliation of the above accrued benefit costs to the
consolidated amounts reported on the Companys Consolidated Balance Sheets follows:

August 31,

2014

2013

(in thousands)

Accrued pension benefits

$

25,964

$

26,917

Accrued other post-retirement benefits

43,713

45,700

69,677

72,617

Current portion of above benefits, included in payrolls and benefits in accrued liabilities

(2,839

)

(3,259

)

Supplemental pension and other deferred compensation benefits

283

317

Deferred retirement benefits

$

67,121

$

69,675

Fair Value of Plan Assets

Our Defined Benefit plans assets fall into any of
three fair value classifications as defined in ASC 820-10. Level 1 assets are valued based on observable prices for identical assets in active markets such as national security exchanges. Level 2 assets are valued based on a) quoted prices of
similar assets in active markets, b) quoted prices for similar assets in inactive markets, c) other than quoted prices that are observable for the asset,

or d) values that are derived principally from or corroborated by observable market data by correlation or other means. There are no Level 3 assets held by the plans as defined by ASC 820-10. The
fair value of our plan assets as of August 31, 2014 and 2013 is as follows (in thousands):

Asset Category

August 31, 2014

Level 1

Level 2

Level 3

Cash Equivalents

$

180

$

180

$



$



Mutual Funds

45,634

45,634





Equities

47,431

47,431





Fixed Income









Total

$

93,245

$

93,245

$



$



Asset Category

August 31, 2013

Level 1

Level 2

Level 3

Cash Equivalents

$

4,069

$

4,069

$



$



Mutual Funds

24,646

24,646





Equities

39,699

39,699





Fixed Income

11,810

9,361

2,449



Total

$

80,224

$

77,775

$

2,449

$



The pension plans
weighted-average target allocation for the year ended August 31, 2014 and strategic asset allocation matrix as of August 31, 2014 and 2013 are as follows:

TargetAllocation

Plan Assets @ 8/31

Asset Category

2014

2014

2013

Equity Securities

50 - 75

%

51

%

61

%

Debt Securities

20 - 50

%

49

%

25

%

Alternative Investments

0 - 15

%

0

%

9

%

Cash/Cash Equivalents

0 - 10

%

0

%

5

%

100

%

100

%

The investment policy for the
plans is formulated by the Companys Pension Plan Committee (the Committee). The Committee is responsible for adopting and maintaining the investment policy, managing the investment of plan assets and ensuring that the plans
investment program is in compliance with all provisions of ERISA, as well as the appointment of any investment manager who is responsible for implementing the plans investment process.

In drafting a strategic asset allocation policy, the primary objective is to invest assets in a prudent manner
to meet the obligations of the plans to the Companys employees, their spouses and other beneficiaries, when the obligations come due. The stability and improvement of the plans funded status is based on the various reasons for which
money is funded. Other factors that are considered include the characteristics of the plans liabilities and risk-taking preferences.

The asset classes used by the plan are the United States equity market, the international equity market, the United States fixed income or
bond market and cash or cash equivalents. Plan assets are diversified to minimize the risk of large losses. Cash flow requirements are coordinated with the custodian trustees and the investment manager to minimize market timing effects. The asset
allocation guidelines call for a maximum and minimum range for each broad asset class as noted above.

The target strategic asset allocation and ranges established under the asset allocation
represents a long-term perspective. The Committee will rebalance assets to ensure that divergences outside of the permissible allocation ranges are minimal and brief as possible.

The net of investment manager fee asset return objective is
to achieve a return earned by passively managed market index funds, weighted in the proportions identified in the strategic asset allocation matrix. Each investment manager is expected to perform in the top one-third of funds having similar
objectives over a full market cycle.

The
investment policy is reviewed by the Committee at least annually and confirmed or amended as needed.

Under ASC 715-30-25, the transition obligation, prior service costs, and actuarial (gains)/losses are recognized in Accumulated Other
Comprehensive Income each August 31 or any interim measurement date, while amortization of these amounts through net periodic benefit cost will occur in accordance with ASC 715-30 and ASC 715-60. The estimated amounts that will be amortized in
2015 are as follow:

Estimated 2015 Amortization

PensionBenefits

OtherPost-RetirementBenefits

(in thousands)

Prior service cost (credit) amortization

$



$

(7,351

)

Net loss amortization

724

4,199

Total

$

724

$

(3,152

)

The following contributions
and benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

PensionBenefits

Other Post-Retirement Benefits

Employer Contributions

Gross

(Subsidy receipts)

(in thousands)

FYE 8/31/2015 (expected)

$

4,372

$

2,758

$

(250

)

Expected Benefit Payments for FYE 8/31

2015

$

5,559

$

2,894

$

(250

)

2016

5,757

3,123

(281

)

2017

5,911

3,339

(315

)

2018

6,268

3,633

(352

)

2019

6,523

4,070

(390

)

2020 - 2024

36,311

26,385

(2,597

)

The pension plan
contributions are deposited into a trust, and the pension plan benefit payments are made from trust assets. For the postretirement benefit plan, the contributions and the benefit payments are the same and represent expected benefit amounts, which
are paid from general assets.

The Companys
postretirement benefit plan is affected by The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act). Beginning in 2006, the Act provides a Federal subsidy payment to companies providing benefit plans that meet
certain criteria regarding their generosity. The Company expects to receive those subsidy payments. The Company has accounted for the Act in accordance with ASC 715-60-05-8, which requires, in the Companys case, recognition on August 31,
2004. The benefit obligation as of that date

reflects the effect of the federal subsidy, and this amount is identified in the table reconciling the change in benefit obligation above. The estimated effect of the subsidy on cash flow is
shown in the accompanying table of expected benefit payments above. The expected subsidy reduced net periodic postretirement benefit cost by $4,185,000, as compared with the amount calculated without considering the effects of the subsidy.

The Company also contributes to voluntary
employee savings plans through regular monthly contributions equal to various percentages of the amounts invested by the participants. The Companys contributions to these plans amounted to $2,752,000, $2,604,000 and $1,839,000 for the years
ended August 31, 2014, 2013 and 2012, respectively.

11.

Income Taxes

Income tax expense consists of:

Year Ended August 31,

2014

2013

2012

(in thousands)

Federal:

Current

$

20,431

$

78,569

$

83,571

Deferred

14,453

4,154

13,806

34,884

82,723

97,377

State:

Current

4,619

17,154

17,559

Deferred

4,323

(1,533

)

7,018

8,942

15,621

24,577

$

43,826

$

98,344

$

121,954

Reconciliation of the
differences between income taxes computed at the Federal statutory rate and the provision for income taxes attributable to income before income tax expense is as follows:

Deferred income tax liabilities (assets) are comprised of the following:

August 31,

2014

2013

(in thousands)

Current deferred income tax liabilities (assets):

Inventory valuation

$

5,901

$

5,681

Accounts receivable allowance

(442

)

(895

)

Accrued liabilities

(3,863

)

(4,560

)

Other

1,214

139

2,810

365

Deferred income tax liabilities (assets):

Property, plant and equipment

71,540

58,694

Accrued liabilities

(26,924

)

(27,386

)

State net operating loss carryforwards

(7,927

)

(8,605

)

Valuation allowance

2,837

3,030

Other

4,614

3,460

44,140

29,193

Net deferred income tax liability

$

46,950

$

29,558

The Companys results of
operations are included in the consolidated Federal tax return of the Parent, See Note 13 to Consolidated Financial Statements. The Company has no Federal net operating loss carryforwards for regular tax purposes. For state purposes,
three entities have Pennsylvania net operating loss carry forwards of $78,000,000, $44,000,000 and $1,209,000, respectively, which will expire between fiscal year 2022 and 2034. Pennsylvania limits the amount of net operating loss carry forwards
which can be used to offset Pennsylvania taxable income to the greater of $3,000,000 or 20% of Pennsylvania taxable income prior to the net operating loss deduction. Due to these limitations, the Company has recognized valuation allowances, net of a
federal benefit, of $2,837,000 and $3,030,000 at August 31, 2014 and 2013, respectively, for Pennsylvania net operating loss carry forwards not anticipated to be realized before expiration.

12.

Disclosures About Fair Value of Financial Instruments

The following methods and assumptions
were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value.

The carrying amount of cash and cash equivalents, trade accounts receivable, the revolving credit facility and current liabilities
approximate fair value because of the short maturity of these instruments. Derivative financial instruments are recorded at fair value using significant other observable inputs (Level 2).

The fair value of long-term debt (See Note 9 to Consolidated Financial Statements) was determined
using the fair market value of the individual debt instruments. As of August 31, 2014, the carrying amount and estimated fair value of these debt instruments approximated $239,525,000 and $259,485,000, respectively.

13.

Stockholders Equity

On July 26, 2013, the Board of
Directors of the Company and the Companys sole stockholder, URI, approved, and the Company filed with the Secretary of State of the Commonwealth of Pennsylvania, an

Amended and Restated Articles of Incorporation of the Company (the Amendment). Pursuant to the Amendment, the capital stock of the Company was increased from 100 to 50,100, of which
50,000 were designated as preferred stock.

Out of
the preferred stock, the Board of Directors created the 6% Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the Series A Preferred Stock) and the Amendment included the designations of the rights and preferences of such series.
Among other things, the Series A Preferred Stock, of which the Company is authorized to issue a maximum of 25,000, carry the following rights:



The Series A Preferred Stock rank: (i) senior to the Companys common stock; (ii) senior to all other classes of equity securities other
than preferred stock which by their terms do not rank senior to the Series A Preferred Stock; and (iii) on parity with any other series of the Companys preferred stock that does not provide it ranks junior to the Series A Preferred Stock;



The Series A Preferred Stock shall receive dividends at a rate of 6.00% of the Stated Value, which is $10,000, per annum;



The Series A Preferred Stock shall have no voting rights unless otherwise required by law;



In the event dividends have not been paid in the aggregate amount payable for six or more Dividends Periods, holders of the Series A Preferred Stock
shall be entitled to elect two directors to the Board of Directors, who shall remain directors until all accumulated and unpaid dividends on the Series A Preferred Stock have been paid in full or set aside for payment. Upon the payment or set aside
of such dividends, the term of office of the directors appointed by the holders of the Series A Preferred Stock shall terminate and the size of the Board of Directors shall automatically decrease by two; and



The Series A Preferred Stock are perpetual and have no maturity date. However, the Company may, at its option, redeem shares of the Series A Preferred
Stock, in whole or in part, on any Dividend Repayment Date on or after July 26, 2023 at a price of $10,000 per share plus accrued and unpaid dividends.

On July 26, 2013, the Company issued 14,116.375 shares
of Series A $1,000 par value per share to United Refining, Inc., its parent. The proceeds from the issuance in the amount of $141,163,750 were used to redeem $127,750,000 of the Companys Senior Secured Notes due 2018, which redemption occurred
on August 30, 2013. In accordance with the Indenture governing the Senior Secured Notes due 2018, the Company obtained an opinion concerning the fairness from a financial point of view of the issuance of the Series A Preferred Stock to URI.

14.

Transactions with Affiliated Companies

On December 21, 2001, the Company
acquired the operations and working capital assets of Country Fair. The fixed assets of Country Fair were acquired by related entities controlled by John A. Catsimatidis, the indirect sole shareholder of the Company. These assets are being leased to
the Company at an annual aggregate rental fee which management, based on an independent third party valuation believes is fair, over a period ranging from 10 to 20 years. During the fiscal years ended August 31, 2014, 2013 and 2012, $5,360,000,
$5,319,000 and $5,049,000 of rent payments were made to these related entities. The Company is not a guarantor on the underlying mortgages on the properties.

Concurrent with the above acquisition of Country Fair, the Company entered into a management agreement with a non-subsidiary affiliate to
operate and manage 10 of the retail units owned by the non-subsidiary affiliate on a turn-key basis. For the years ended August 31, 2014, 2013 and 2012, the Company billed the affiliate

$1,207,000, $1,229,000 and $1,289,000 for management fees and overhead expenses incurred in the management and operation of the retail units which amount was deducted from expenses. As of
August 31, 2014 and 2013, the Company had a (payable) receivable to the affiliate of $(151,000) and $32,000, respectively, under the terms of